Housing Market to Worsen

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March 25, 2010

Up and down by Sento

A great start of 2010 housing market is very nice, but it does not have to mean anything! Actually, Canadian real estate market should be pretty weak in 2010′s if compared to the last decade, a new report by Scotiabank entitled “Global Real Estate Trends” predicts.

Still, 2010 ought to be a successful year – the bank expects home sales through MLS to reach as much as 510,000 which would be a 10 percent increase from 2009. Average price for a home is predicted to rise too, by about 8 percent to a record $345,000. The same trend should be in housing starts, which are expected to grow from 149,000 in 2009 to about 190,000 this year.

The second half of this year is when the situation should start worsening, as the interest rates will likely rise and harmonized sales tax will become effective in Ontario and British Columbia, the report states. Well, it sounds quite reasonable. The market is really hot at the moment, thus it needs to cool off a bit eventually. However, it is really hard to predict the situation for next 10 years.