Housing Markets In Canada Are Cooling

Housing markets in Canada are cooling, but none will suffer a U.S. style meltdown in 2007-2008.

All Canadian markets will avoid the double-digit price declines experienced in many markets in the U.S. and Canada’s strongest markets in Alberta and British Columbia will not suffer the price crashes seen in some formerly hot spots in southern California, Nevada, Arizona, and Florida.

In Canada over the past six months, price increases have slowed except for a few hot markets but all markets are supported by strong economic fundamentals such as job growth and stable mortgage rates.

In the U.S., the economies of certain regions and cities have weakened throughout 2006 and can’t continue to support house price increases.

Housing markets in both Canada and the U.S. have had robust price increases for several years, with some regions seeing spectacular gains but the slump in U.S. markets has been exacerbated by other factors.

There is more speculation in the U.S. than we have seen in Canada. The U.S. has had more liberal mortgage lending policies than Canada. For example, interest-only mortgages, which have just been introduced in Canada, have been available for years in the U.S.