RBC says interest rate rise would “substantially moderate prices”… Calgary builders set for a bumper year… Vancouver needs more townhouses… And a new report compares Canada’s household net worth with the US over 42 years…
Interest rates would “substantially moderate prices”
A report by RBC Economics says that a rise in interest rates would have a big impact on the housing market but would be a cooling rather than a crash. The bank believes that we could see a rate rise by the end of this year with 2015 seeing a tighter mode by the Bank of Canada. RBC predicts that a rate rise would see the volume of resales fall by just shy of 1 per cent and prices rise by around 1 per cent compared to 4.3 per cent average this year. The report also forecasts a slowdown in the condo market due to high levels of supply. Overall, RBC suggest that next year will see some corrections but it may be 2016 before the full impact of rate rises would take effect. Read the full story.
Calgary builders nearing a record year
A high level of construction in Calgary could see 2014 being the sector’s busiest since 2006. Demand for properties together with a shortage of construction workers means that builders are under pressure; the shortage of labour means projects take slightly longer. Wayne Copeland, president of the Canadian Home Builders Association-Calgary Region says that activity is similar to how it was during the boom in 2006/2007. He says that getting more young people into the industry is important; generally the workforce is getting older. Read the full story.
Vancouver townhouse shortage
As an alternative to a condo or single-family home, townhouses are a great option…if you can find one. In Vancouver there is demand, but not a lot of supply. Realtor Bon Rennie says that they are probably the most undersupplied part the housing market. The issue is zoning; why build a townhouse if you can build a condo development and reap higher yields. Building on land already zoned for townhouses or single-family homes is an option. While townhouses were once seen as an affordable option, the lack of supply is changing that. They are cheaper than a single-family home but the gap is narrowing. Property density though may see a move towards townhouses. With around 5,000 people moving to Vancouver each year there is a focus on better use of the available land. Read the full story.
StatsCan releases comparison between Canadian and US household net worth
Canadian household net worth per capita reached 77 per cent of the United States' level in 2012, according to a new study, "Net Worth in the Household Sector, 1970 to 2012: A Canada–United States Comparison." Over the 42 year period the net worth of Canadian households was at 60 per cent of our US neighbours. Read the full story.
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