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Still, Fitch expects mortgage delinquency rates to remain near an all-time low of 0.3 per cent next year as 5.7 per cent low unemployment, steady job growth and rising wages support homeowners.
Compared with the 23 other countries in the outlook, Fitch’s forecast for house price growth in Canada is close to the lowest, second only to Italy’s 0.5 per cent increase. Colombia is the highest, at 7%; us house prices are expected to rise by 3% next year. In the overall market assessment, Canada and the United Kingdom are the only countries rated as stable / negative, while the rest are rated as stable.
Fitch forecasts that mortgage growth will also be low next year, at 1 per cent, as loan eligibility criteria remain stringent. By contrast, Fitch said US mortgage activity could fall 5 per cent as refinancing slows.
The report points out that Canada’s largest public mortgage support institution, the Canadian Mortgage and Housing Corporation (Canadian Mortgage and Housing Corp.). Market share is declining, with loans eligible for government insurance falling by about 20 per cent as restrictions are tightened. CMHC said a project aimed at helping first-time home buyers could help boost the market.
“while this should help make home purchases more affordable, buyers still have to comply with stricter standards imposed by the government,” Fitch said. ”
Real house prices in Canada will fall slightly next year as many buyers cannot afford houses and others who want to enter the market cannot get loans, according to debt rating agency Fitch Ratings.
Fitch said on Tuesday in its Global Housing and Mortgage Outlook 2020 (Global Housing and Mortgage Outlook-2020) that house prices in Canada would rise by about 1 per cent, which would actually mean a decline compared with inflation of about 2 per cent.
“We believe that excessive burdens, especially in Toronto and Vancouver, and macroprudential measures to limit the number of borrowers eligible for home loans will continue to limit the rise in house prices,” Fitch analyst Susan Hosterman wrote. “House price growth in both cities is limited by state lending restrictions and local home purchase restrictions.”