Summary
- In Canada, since the downward correction in home prices ran its course, the rebound has been such that, in several large agglomerations, prices have rapidly returned to, if not surpassed, their pre-recession peaks.
- Very low interest rates have fostered an incredibly rapid recovery in existing-home sales. However, new listings have been slow to follow suit. This explains the upward pressure on prices.
- We analyze the housing market in Canada’s three largest agglomerations. Where Toronto and Montreal are concerned, we believe that the recent acceleration in new-housing construction will help slow the advance in home prices. For this to occur in Vancouver, housing starts would have to pick up considerably.
- Consequently, chances are that, in the near future, home prices will no longer continue their sharp ascent nationwide but only on a regional basis.
