The housing market in Canada is expected to remain calm next year and the prices are widely expected to fall. However, it is not at a risk of being affected by mass foreclosure, according to Financial Post.
Canada’s housing market could see a further correction with a tightening of interest rates but it will remain relatively stable, especially when compared to the US. Debt rating firm DBRS Ltd also confirmed that the Canadian housing market will be in a much better situation when compared to the United States in 2011. The firm attributes this scenario to three important reasons. These include significantly better Canadian underwriting practices, more far-sighted and cautious lending practices and less hard-line lenders than the average American mortgage lender.
As the housing demand cools off, home prices are also expected to drop, with TD Bank estimating a 2.7% fall in the coming year. DBRS adds that the current assessment points to a moderation in home prices with not many factors indicating that prices will see an upwards trend in 2011. The coming year may be an opportune time for Canadians looking to buy homes. The fall in prices is being viewed in a positive light by some economists after Canadian Imperial Bank of Commerce (CIBC) reported that home prices in Canada are currently over-valued by about 14%.
