Kindred condo mississauga . Is the house price finally going down? Canada’s property market is still a record, but prices are likely to fall next year.Please Visit: Kindred condo mississauga to Get Your VVIP Registration Today!
On Thursday, Fitch Ratings said in a new report that demand had been unsustainable and that house prices were expected to fall 3-5 per cent by 2021 after rising 7 per cent in 2020.
Susan Susan Hosterman, a senior director at Fitch, said in the report: “We attribute the expected decline to rising unemployment and falling demand caused by growing affordability problems. In addition, falling rents, a sharp decline in immigration and B20 mortgage affordability stress tests will put further pressure on house prices. ” The agency also said that when household debt rebounds, affordability will be negatively affected. Household debt fell by nearly 20 percent as a result of government support and the payment of holidays. It also said fewer buyers would be eligible for the B20 stress test.
Rents in major Canadian cities have fallen by 10% to 15%, so Fitch says the drop in monthly rents will make buying less attractive.
The number of immigrants fell by 41% compared with the same period last year. Despite the ambitious goals set by the federal government, Fitch expects the number of immigrants to remain low and put pressure on demand.
The phasing out of the mortgage extension program is seen as another disadvantage. As many as 16% of all mortgage borrowers are delaying repayment, according to CMHC. “Horstman said.” With the six-month repayment period coming to an end and borrowers having to resume repayments in 2021, Fitch expects default rates to rise to 0.35% to 0.5% as rising unemployment puts further pressure on borrowers. “this is because service providers have a close relationship with borrowers, and after they include borrowers in their repayment plans, they keep a close eye on their financial situation,” Horstman said. Historically, loan service institutions have been actively providing loan modifications or working with borrowers to make loans affordable. We expect default rates to return to pre-epidemic levels by 2022 as the economy improves.