Economist Predicts Housing Slump Before Decade Ends
The Bank of Montreal has released analysis which predicts some tough times ahead for the housing market. Economist Robert Kavcic explains that the high number of ‘echo boomers’, the children of the baby boomer generation; typically young professionals in their twenties and thirties are boosting demand (and prices) especially in the urban markets. This, however, is not going to continue. Fewer in that demographic (and of course without the same level of help from the ‘bank of mom and dad’) will mean demand drops. This, Mr Kavcic predicts, will particularly hit Quebec and Atlantic Canada due to lower population growth from immigration. The Bank’s forecast is for this turnaround to hit in 2018. Read the full story.
Bank of Canada Says Property Crash Would Devastate Economy
Speaking as the Bank of Canada released its ‘stress test’ on the economy, governor Stephen Poloz said yesterday that a crash of the housing market would be devastating to the economy. Although he though it unlikely that the worst would happen, Mr Poloz warned that external issues, such as failure of China’s shadow banking system or a global recession, could land households with debt and trigger a rise in defaults. The governor said that the housing market is ‘vulnerable but not risky’ and still predicts a soft landing. Read the full story.
Price Rise in May
’s National Composite House Price Index shows that prices increased again in May, by 0.8 per cent. Hamilton, Quebec City , Toronto, Calgary, Edmonton and Montreal all saw rises, with Ottawa unchanged and Winnipeg and Victoria seeing a drop in prices. Halifax saw its biggest month-to-month rise ever at 3.1 per cent, which is some good news after recent declines. Read the full story.
Alberta’s Push to Go Green as Rebate Scheme Returns
Homeowners in Alberta will be able to take advantage of a rebate scheme being offered to those replacing energy-guzzling appliances with greener alternatives. A similar scheme ran until a few years ago and paid out $52 million to homeowners who replaced items such as fridges, furnaces and washer-dryers. The scheme is set to be officially announced in October and will be funded by cash paid by large businesses that miss their greenhouse gas targets. Read the full story.
Former BoC Governor Hints at Rate Rises
, former governor of the Bank of Canada, now in the equivalent role in the UK has warned of interest rate rises ‘sooner’ than expected. Most major economies have kept rates low but this is predicted to change. In Canada, rate rises are forecast to be next year, but the same has been expected in the UK. With growth and unemployment figures showing better than expected improvement, Mr Carney says the Bank of England may increase rates ‘sooner’. It’s a reminder that analysts don’t always know the full story, and if it can happen elsewhere, it can happen in Canada. Read the full story.