RBC forecasts Canadian housing market will cool in 2015 if interest rates rise
TORONTO - RBC Economics says higher interest rates will put a strain on the Canadian housing market in 2015 and "substantially" moderate prices increases.
In its latest Canadian housing forecast, the bank (TSX:RY) says Canada's current historically low interest rates are not "sustainable" and it forecasts longer-term interest rates will rise by the end of the year in anticipation of a return to tightening mode by the Bank of Canada in 2015.
RBC says if current rates rise, it anticipates home resales to fall by 0.9 per cent to 463,100 units next year following an increase of 2.1 per cent to 467,200 units in 2014, while it sees home prices increasing just 1.1 per cent in 2015, compared with a jump of 4.3 per cent this year.
RBC describes those developments as a cooling not a crash in the housing market, which is supported by a variety of other factors, including steady immigration rates and good employment outlook.
The report said condo construction, particularly in the major cities, will be one of the main reasons the housing market will slow in 2015 as more units become available.
It cautioned that although there will be slowdown in 2015, the big impact on the Canadian housing market will be likely not be seen until 2016 once higher interest rates are "normalized."
Read more Business News
- It's decision day for teachersBC - 6:22 am
- Few leads in clubhouse fireWest Kelowna - 9:38 am
- Letter to parentsCentral Okanagan - 6:54 am
- Dog killed in coyote attackPenticton / S. Okanagan - 5:00 am
|QHR Technologies Inc||1.32||+0.07|
|Anavex Life Sciences||0.2295||-0.0066|
|Copper Mountain Mining||2.70||-0.03|
|Sunrise Resources Ltd||0.02||-0.005|
|Mission Ready Services||0.29||0.00|
There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...
Part 1 of 2 Photo: Thinkstock.com1. Move in with your parents or in-laws Explain that you're thinking strategically in moving back home. The quickest way to get into the housing market is to ma...
Article written by Linda Bustos Though I’d never recommend “lowest prices” as a unique selling proposition, I notice many retailers use a Price Match Guarantee or even a 110% Guara...