However, there are some positive points too. The report shows regional variations with prices continuing to rise in Toronto
, decline in Calgary
, and remain flat in Quebec.
Fitch says that last week’s interest rate cut will do little to change the housing market as mortgage rates are already low. It expects that there will be moderate correction of prices in many markets over the medium term but does not expect significant downturn.
It also assesses the Canadian mortgage industry as being less exposed to risky lending. Although the report highlights potential risk, the overall forecast is for a soft landing for Canada’s housing market.
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The latest assessment of the Canadian housing market by ratings agency Fitch calls for overvaluation of around 20 per cent.