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This is the first time since 2008 that more than 60% think that house prices will rise again.
Generally bullish market psychology will undoubtedly aggravate the continuous heating up of the real estate market. And the fact is that a housing supply for a long time there will be more than a dozen customers to rob offer. Both speculators and investors will worry that if they do not buy, it will be too late, thus further pushing up the market and aggravating the burden on rigid demand and low-income families!
RBC bank experts also believe that such missteps and panic can prompt people to make decisions that are hot-headed and bear heavy consequences for life. And the important factor of this phenomenon is the ultra-low interest rate!
The Nanos poll can be said to sound the housing market alarm, and Statistics Canada also gives a “warning”. Data last week showed that new home prices across the country rose at a 30-year high in February. The latest house price index of the Canadian Real Estate Association (CREA) shows that house prices across the country have risen by 17% in the past 12 months.
House prices in 12 major cities across the country have risen by more than 30%, equivalent to nearly 1% of the market. If it goes on like this, will it really double next year?
There are a number of potential reasons why the Canadian housing market has rebounded from the epidemic:
Mortgage rates fell to an all-time low last year, making it much cheaper to take on all the debt. That’s why while house prices are soaring, the cost of ownership is rising by only 2.2% a year, in line with recent historical averages.
The ability to work from home and move to remote jobs far from the city centre during the pandemic has also led to a sharp increase in demand for single-family homes, especially in the suburbs of big cities and small towns. At the same time, the supply of housing in Canada has been tight, and market conditions that fall short of demand will naturally push up prices.
But concerns began to grow, and even Tiff Macklem, governor of the Bank of Canada, was forced to change attitude.
He said at the end of January that he was not worried about the hot Canadian housing market, making it clear that low interest rates and Canadian demand for more space, rather than property speculation or speculation, were responsible for the rise in prices.
But at the beginning of this month, the central bank governor changed his tune, making it clear that the central bank did not welcome rising house prices. McCleme admitted that he saw “some early signs of excessive prosperity”. However, he stressed that the central bank’s focus remains on keeping interest rates low for a long time to boost the economy, especially job creation.
In its interest rate policy statement on March 10, the Bank of Canada said housing transaction activity was “much stronger than expected”. But the central bank left interest rates unchanged at 0.25%.