Canada's housing market keeps chugging along, and real estate watchers are becoming increasingly worried.
ADVERTISEMENT
Canada's housing market appears to be 'teetering on the brink of a downturn'
Canada's housing market seems to be on the verge of the downturn.
Demonstrators gather protesting against high housing prices for single family homes in downtown Vancouver, British Columbia, May 23, 2015.
Home sales in the Vancouver metro area rebounded by 22.8% in May, the third-highest for the month on record. Notably, demand has shifted from single-family homes to condominiums and townhouses.
May, according to the Toronto Real Estate Board. But, at the same time, prices kept climbing in the region: the average selling price for properties was 14.9% higher year-over-year.
Canada's home price index rose 0.8% month-over-month in April, the highest increase since May 2016. That came in above expectations of up 0.3% and followed the 0.2% uptick the prior month. Toronto saw prices rise 2.1% and Vancouver saw an increase of 1.2%.
ADVERTISEMENT
"" he explained. "Meanwhile, the slowdown in Toronto's much larger housing market has gone from bad to worse, with a correction in house prices coming soon."
On Thursday, the Bank of Canada released its semi-annual Financial System Review, in which it warned that a correction in either Toronto or Vancouver's housing markets are key risks to Canada's economy. It stated there's a "moderate" chance that such a correction could happen.
Specifically, the ratings agency said banks with more mortgage exposure to either the greater Toronto or Vancouver areas could be more sensitive to swift market corrections in those markets.
"ost Canadian banks should be able to withstand a market correction, but in the event of an adverse unemployment shock or rapid rise in interest rates, banks could be more heavily impacted."
JOIN OUR PULSE COMMUNITY!
ADVERTISEMENT
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
ADVERTISEMENT