Future Housing Prices in Canada

With housing prices collapsing in parts of the United States, many Canadians are wondering if the same fate awaits the real estate market here.

Housing experts themselves are divided on that question.

Ted Tsiakopoulos, Ontario regional economist for the Canada Mortgage and Housing Corporation, laid out the optimistic case.

“We don’t see a U.S.-style housing market meltdown in Canada for three very important reasons,” he told Canada AM on Monday.

• Canadian housing prices have grown in a “steady, sustainable way”
• Mortgage arrears are at a low level, which suggests financial institutions have been prudent in their lending practices
• Canada’s overall economic fundamentals remain healthy

In mid-March, however, the Royal Bank reported that home ownership costs have risen to the highest point since 1990.

That year marked the “peak of the housing bubble,” it said.

However, the bank was optimistic the current situation should ease. “Going forward, falling mortgage rates, cooler forecast house price gains and decent income growth should all lead to improved affordability across most markets,” it said.

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