Tuesday, April 21st5.0°C
24963
25782

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

24442


Recent Trending




Today's Market
S&P TSX15412.60+52.05
S&P CDNX703.65+0.80
DJIA18034.93+208.63
Nasdaq4994.60+62.79
S&P 5002100.40+19.22
CDN Dollar0.8171-0.0006
Gold1193.40-0.10
Oil56.15-0.23
Lumber247.70-0.70
Natural Gas2.554+0.018

 
Okanagan Companies
Pacific Safety0.115-0.005
Knighthawk0.010.00
QHR Technologies Inc1.42+0.02
Cantex0.035+0.005
Anavex Life Sciences0.385+0.055
Metalex Ventures0.085+0.010
Russel Metals27.42-0.06
Copper Mountain Mining1.10-0.03
Colorado Resources0.11+0.01
ReliaBrand Inc0.005+0.001
Sunrise Resources Ltd0.04+0.00
Mission Ready Services0.185+0.010
Decisive Dividend Corporation1.80+0.15

 



24442

FEATURED Property
2255043$554,900 / $574,900 / $690,000-East Kelowna/ N. Glenmore/ Glenmore
$554,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Calling on your help!

Has the internet flattened prices as predicted? Has the internet created opportunities for your business to find higher priced markets further afield? Is posting prices on your website a good thing o...


Living with Plan B

“It does not do to leave a live dragon out of your calculations, if you live near him.”― J.R.R. Tolkien, The Hobbit Photo: Thinkstock.comHuman beings are optimists by nature. Whether...


Reverse mortgage solution

With the housing and financial markets on solid footing, some retired Canadians may consider cashing in their growing assets to enjoy vacations and major home renovations. Others, on the other hand, a...

_



26069

25221


Member of BC Press Council


25771