Difficulty in getting credit and job loses have taken their toll on Canadian’s home purchasing desires, according to the Q2 Global Real Estate Trends report by Scotiabank.
“Weak consumer confidence, high unemployment and tight credit conditions continue to weigh heavily on housing demand and pricing,” said Adrienne Warren, senior economist at Scotiabank. “Canadian housing activity remains relatively buoyant, but has shifted to a slower growth trajectory.”
Earlier, CMHC reported that construction of new homes dropped 6.1 percent from June to a seasonally adjusted 208,500 units. The insurer also forecasts a “moderate slowdown” in the housing market for the rest of this year and 2013.
The report said adjusted for inflation, national average home prices dropped by as much as 2 per cent in Q 2 matching the year’s first quarter decline. Scotia said he combined effects of tougher mortgage insurance regulations and slow job growth moderated consumer confidence while steady housing supply in some markets reigned in prices.
Adjusted for inflation, national average prices fell 2 per cent y/y in Q2, matching the first quarter decline. Housing demand has been tempered by a slower pace of job growth and the cumulative effects of tighter mortgage insurance rules over the past several years, while more balanced supply conditions in most parts of the country have restrained price increases.