The capitol residences . The default rate in Canada has increased? Although default rates are expected to increase in 2021, levels of bad sales and foreclosures will not rise to the levels of the United States during the financial crisis.
Lenders are closely monitoring borrowers’ finances and are trying to help more borrowers “proactively repay”.
In addition to the end of the “debt holiday” policy, there are other factors that may push down house prices in Canada, such as a decline in overall rents, a sharp drop in the number of immigrants, and so on.
According to the latest data, rents in major Canadian cities have declined recently, ranging from 10% to 15%. From January to July 2020, the number of Canadian immigrants fell 41% from a year earlier, and the number of immigrants is expected to remain low next year.
At the same time, mortgage stress tests will also put further pressure on house prices across the country.
Analysts say the housing market could recover as quickly as 2022 as long as the Canadian economy returns to pre-epidemic levels.
In the early days of the COVID-19 epidemic, house prices soared in the summer due to restrictions on house viewing activities and curbed demand for houses, but prices in the Canadian housing market have actually been falling, and sales have soared in part because more people have switched to telecommuting. Demand and requirements for housing have increased.
In October 2020, average house prices across the country fell slightly from September, but increased by 15.1% over the same period last year.
Rishi Sondhi, an economist at TD Bank in Toronto, said the trend is likely to continue in December. He warned that expensive real estate markets such as Toronto and Vancouver were under increasing pressure. In the long run, it is difficult for house prices to rise.
“despite the decline in house prices in October, the market is tightening, people are buying more houses, and house price growth in many cities will remain positive in the fourth quarter.”
Fitch also forecasts that Canadian house prices will grow by 7% for the whole of 2020, but says a combination of factors will reduce house prices by 3% or 5% in 2021.
The decline in house prices may be a turnaround for those who buy a house for the first time or are ready to change. But after all, the real estate market is changing all the time, and no one knows for sure, and it remains to be seen how it will go in the future.