Four reports released Tuesday offered different takes on Canada’s housing market, but the tone overall was one of worry about the possibility of an abrupt slowdown.
Thanks to interest rates hovering around near-record lows, Canada’s housing market continues to show signs of frothy sales and prices despite concerns from policymakers about high household debt levels.
That home price growth has been “broad-based and rapid,” and has moved at a faster pace than what fundamental drivers would suggest, bond-rating firm Fitch Ratings said in a report.
Fitch sees Canada’s housing market as about 21% overvalued, with homes in British Columbia, Quebec and Ontario seen as being at risk of a significant price correction.
“With a high level of employment and individual net worth tied to the value of the housing stock, a housing downturn could have serious consequences for the overall economy in Canada,” said Stefan Hilts, director at Fitch.
http://blogs.wsj.com/canadarealtime/2013/11/19/reports-show-canada-housing-market-worries-remain/
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