New condos mississauga . The new house in the traditional rich area, the town house in the core area of Wanjin. Bankers tend to worry about this rise in house prices, and they worry that low interest rates could fuel bubbles.
On Wednesday, January 20, the central bank kept overnight interest rates at 0.25% and reiterated that it would keep borrowing costs low until the damage caused by the 2023 epidemic was fully repaired.
The lower financing costs could mean that demand for single-family homes will continue to outstrip supply in 2021, according to the monetary policy report attached to the central bank’s decision to keep interest rates unchanged.
The Canadian news agency reported last week that CMHC’s risk assessment showed that when the Canadian economy gradually recovered from the pandemic, it could lead to unemployment as high as 25%, which in turn caused house prices to fall by nearly 50%.
CMHC describes Canada’s economic recovery as a W-shaped recovery: the recovery starts quickly after the recession, but then quickly falls into another downturn, and then recovers again, looking like the letter “W”.
In a recovery that is not W-shaped, but U-shaped, the recession will gradually improve, with the highest unemployment rate approaching 15% and house prices falling by nearly 34%.
It is true that the epidemic has dragged down GDP growth, and Canadian household debt levels have almost reached a record, but the Canadian housing market is strange. Instead of falling by 9% to 18%, house prices have risen by hula instead.
Not to mention the situation of a certain month last year, not to mention the hot market in the GTA region, that is, for the whole of 2020, from the perspective of Canada as a whole, both sales and house prices are only rising but not falling.
According to a monthly report released last week by the Canadian Association of Realtors (CREA), even after a pandemic and tightened public health restrictions, Canada sold 551392 homes for the whole of 2020, an increase of 12.6% over 2019 and a new annual record.
In terms of house prices, the national average house price reached a record $607280 in December last year, up 17.1% from the last month of 2019.
Although the epidemic has led to the closure of a large number of businesses, a large number of workers have lost their jobs, and Canadians have been patiently waiting for prices to fall before buying homes, unfortunately, their hopes have been dashed.