RBC says that the housing market is not at great risk of overheating, but price rises are making ownership unattainable for many
Assessment of the Canadian housing market can be viewed from many perspectives with conclusions varying.
For existing homeowners, including the many Canadians who are real estate investors, fears that the current escalation of prices due to high demand brings concern of a market crash.
Meanwhile, those that would love nothing more than to own a home are increasingly fearful that their dream will never become reality.
Two reports published Monday speak to these two groups.
Firstly, RBC gave its latest analysis of the housing market amid moderating sales volume in recent months.
Robert Hogue of RBC Economics wrote that concern about the market overheating has eased to a “more sustainable pace” and the risk of an “uncontrolled upward spiral” in prices has “considerably diminished.” Demand remains supportive of prices though.
Other positive factors including the labour market and rising immigration will also support the market while there is risk from the virus, inflation (and rising interest rates), and additional regulation.
Threats to prosperity
However, Hogue notes that rising prices have exacerbated affordability issues, especially in Toronto, Vancouver, and, increasingly, Montreal.
This issue is further highlighted in a new report from Royal LePage.
The nationwide brokerage network’s survey found that 84% believe that an increasing share of Canadians will never be homeowners. This rises to 88% for respondents aged 18-34 years.
Around 4 in 10 respondents (57% of younger adults) said that housing policy will influence their vote at the upcoming election.
“Access to housing is a fundamental human right, for without adequate shelter, a family lacks the foundation upon which they can live and work safely and with dignity,” said Phil Soper, president and CEO, Royal LePage. “In this election, Canadians are demanding ideas, answers and a commitment to address the nation’s housing supply and affordability crisis. The growing housing deficiency in this country is one of the great threats to our prosperity as a people.”
