In The Global Real Estate Trends report, The Bank of Nova Scotia concurs that the housing market is not headed for a crash but for a state of relative stability.
“The long-anticipated slowdown in Canadian housing activity is well underway,” said the report. “Home sales have dropped more than 10 per cent from last spring, and are now running below historical averages in most major cities. Prices in turn are levelling out, with the return of balanced market conditions.”
The report’s primary findings suggest an aging population will lead to more retirement (and therefore slower economic growth) and fewer housing sales and listings than historical norms.
Adrienne Warren, senior economist with Scotiabank, predicts a decline of 5 per cent over the next couple of years as opposed to a sharp correction, and says current market conditions will slow more than just housing starts and sales. According to Warren, they’ll also keep homebuyers and investors on the sidelines.
“We expect the reduced momentum in sales and construction will continue in 2013,"said Warren. High home prices and tougher mortgage financing rules are tempering demand, especially among first-time buyers. Investors also appear more reluctant to enter the market at current valuations.”
In light of the predictions for the residential sector, could investor interest in commercial properties soon be on the rise?
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