Globe & Mail – “Canada’s Housing Market At Tipping Point”

Canada’s housing market is now at a “tipping point,” with some cities still showing strong growth and others cooling down, Royal LePage says.
The study released today by the brokerage backs up anecdotal evidence from across the country, suggesting an inevitable slowdown for the housing boom.
It also comes amid fears of overheating in some regions, notably Toronto and Vancouver, and moves by the federal government to slow the fevered pace of borrowing among Canadians who have embraced record low interest rates.
“We have had three years of solid house price appreciation in almost all regions of the country,” chief executive officer Phil Soper said in the report.
“Confidence in Canada’s real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely,” he added.

“The most recent set of mortgage changes, the fourth in four years, is also the most aggressive,” Mr. Soper said. “The cumulative impact of these new regulations has created a significantly higher hurdle for young buyers seeking their first home and comes at a time when the market was slowing of its own accord.”
Mr. Soper described the timing of Finance Minister Jim Flaherty’s latest move as “unfortunate.”
Toronto-Dominion Bank also sees the housing boom likely ending next year, with “more pronounced declines” in British Columbia and Ontario, according to a study released yesterday.
“The expected housing pause will reflect stricter regulations on mortgages and lending and what we expect to be a gradual rise in interest rates,” said economists Derek Burleton and Jacques Marcil.
Separately today, Canada Mortgage and Housing Corp. said construction starts across the country climbed in June, largely because of condo development in Quebec and British Columbia.

– from ‘Canada’s housing market at ‘tipping point’, Michael Babad, Globe and Mail, 10 Jul 2012 [thanks to the readers who quoted, cited and e-mailed this article.]

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