Friday, October 24th2.5°C
23888
23589

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."

The Canadian Press


Read more Business News

22831


Recent Trending




Today's Market
S&P TSX14486.83+174.76
S&P CDNX808.600.60
DJIA16677.90216.58
Nasdaq4452.792+69.945
S&P 5001950.82+23.71
CDN Dollar0.8922+0.0018
Gold1233.00+3.90
Oil81.14-0.61
Lumber334.10+4.50
Natural Gas3.581-0.041

 
Okanagan Companies
Pacific Safety0.11-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.17+0.02
Cantex0.0550.00
Anavex Life Sciences0.1980.00
Metalex Ventures0.04-0.01
Russel Metals33.16+0.63
Copper Mountain Mining2.08-0.02
Colorado Resources0.14-0.005
ReliaBrand Inc0.013+0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.41+0.005

 





FEATURED Property
20974062722 Dubbin Road
3 bedrooms 4 baths
$1,995,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...


We can get on together

I was in LA this week. I witnessed such crazy and unusual circumstances as I strolled along Hollywood Blvd and Sunset Blvd. A far cry from sleepy Peachland in the Okanagan! The strange thing was, I f...


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...

_








Member of BC Press Council


22771