Possible Canadian Housing Crash? Do Not Fear Edmonton
In case you missed it, theglobeandmail.com published an interesting report last 11 November written by Michael Babad entitled “Why we shouldn’t fear a crash in Canada’s three hottest housing markets”.
Here’s the breakdown of it.
In the housing and demographics side, senior economist Robert Kavcic found in his research that while the residential construction starts are at record levels, still grew 4% year over year.
Toronto is experiencing a 4 1/2 –year low in constructions starts due to the cooling down of population growth.
Mr. Kavcic further said that there is no meltdown in the horizon since the constructions happening in Toronto were mostly started in 2012 and 2013, which means there is no real overbuilding.
As what we have discussed in our previous posts, housing starts have declined in October reaching a low of 183,600, surpassing projections by economists.
“The focus in Canada is on Vancouver, Calgary and Toronto, where prices are running hot. Most recently, the Bank of Canada has said other markets are showing signs of a soft landing.” the report said.
Gluskin Sheff + Associates chief economist David Rosenberg suggests that the downside surprise in data is a welcoming point for policy makers, where homebuilding is staying consistent with the Canadian household formation trend.
This trend is well above the requirement to match the growth in population as noted by Brian DePratto, Toronto-Dominion Bank economist.
He further adds that “A gradual rise in interest rates, along with the moderate level of overbuilding will help moderate housing activity.”
All this point to a rosy real estate industry in Edmonton. The music still continue to play and so is the need to dance to it. Buy now. Check out the latest available homes for sale in Edmonton and nearby areas on our high-speed Edmonton MLS.
Read complete report here.
Tags: canada housing crash, canada housing market, edmonton houses, edmonton housing news, edmonton mls, edmonton news, edmonton real estate bubble, edmonton real estate news, the wallstreet journal canada
