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Housing Bubble Fears Appear Unfounded? |
| Posted by Peter McKinnon (peterlmckinnon) on Mar 16 2011 |
Housing bubble fears appear unfounded, markets show signs of stabilizing:
Will Dunning is one of the most respected housing market analysts in Canada. Recently, he stated that while housing demand is well below its pre-recession peak and is still showing the after-effects of the recession, recent job creation will start to positively affect housing activity later this year and into the next. Canadian housing markets and resale prices appear to be stabilizing, supported by a moderate rate of employment and economic recovery. A flat employment-to-population ratio across Canada suggests that jobs are being created at the same rate as population growth – in Toronto, the rising job creation rate is even more encouraging. However, employment rates remain well below pre-recession levels and continue to limit housing demand.
The main story here is that high housing prices and a significant rebound in the stock market are generating economic recovery, which might soon accelerate. Housing demand should gradually follow job creation. It takes time for job creation to get converted into housing demand, and therefore Dunning expects that housing growth will remain moderate for awhile.
Today’s historically low interest rates, along with a moderate rate of employment and economic growth, are signs that now may be a good time to refinance or renew your mortgage.
Peter McKinnon
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Last changed: Mar 16 2011 at 9:18 AM
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