TORONTO, ONTARIO--(Marketwired - May 28, 2013) - According to a new report from BMO Economics, the Canadian housing market is calming rather than crashing, as the impact of tougher mortgage rules and cooling credit is partly offset by the supportive influence of low interest rates and continued income growth.
"House prices have hit record highs in most regions across Canada, though the rate of appreciation has slowed," said Sal Guatieri, Senior Economist, BMO Capital Markets. "Resale markets are largely balanced, though buyers have gained leverage in some provinces, including Quebec and British Columbia. Steadier prices are expected in the year ahead amid decent job growth. A benign outlook for rates and income should support affordability this year, weighing towards relatively steady sales and prices in most regions.
Canadian Housing Market Balanced
Mr. Guatieri noted Toronto house prices, though slowing, hit a record high in April; gains in the detached market more than offset slightly lower condo values. Alberta enjoyed decent price gains, while Vancouver's prices have declined moderately.
"Nationwide, housing starts have adjusted to the reduced demand, returning to household formation rates," Mr. Guatieri added. "Meantime, Toronto continues to build up rather than out to meet supportive demographic demand."
BMO Housing Confidence Report
Nearly half of Canadian homeowners (48 per cent) intend to buy a property in the next five years - mostly unchanged from fall 2012 - signaling a high level of confidence in Canada's housing market is continuing into 2013.
Laura Parsons, Mortgage Expert, BMO Bank of Montreal, noted that it is essential for both buyers and sellers to be aware of any changing conditions on the local level. "If planning to buy or sell a property, consider working with an expert who can help you make decisions that are appropriate to the health of your local market, and more importantly, that responsibly fit within your particular financial situation."
The full report from BMO Economics can be downloaded at www.bmocm.com/economics .
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly diversified North American financial services organization. With total assets of $542 billion as at January 31, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.
