{"id":11877,"date":"2019-03-12T10:10:55","date_gmt":"2019-03-12T17:10:55","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=11877"},"modified":"2019-03-04T16:12:00","modified_gmt":"2019-03-05T00:12:00","slug":"demand-borrowing-costs-are-keeping-the-canadian-housing-market-from-crashing","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2019\/03\/demand-borrowing-costs-are-keeping-the-canadian-housing-market-from-crashing\/","title":{"rendered":"Demand &#038; Borrowing Costs are Keeping The Canadian Housing Market from Crashing"},"content":{"rendered":"<p style=\"text-align: justify;\">An economist with one of Canada\u2019s biggest banks says the country\u2019s real estate market is \u201cset for a slog\u201d this year, but nothing worse.<\/p>\n<p style=\"text-align: justify;\">TD Senior Economist Brian DePratto outlines two main factors why the Canadian housing market isn\u2019t hurtling towards a crash.<\/p>\n<p style=\"text-align: justify;\">\u201cSo, why not a worse outlook, or even an outright crash? Two reasons: first, fundamental demand is still strong, particularly in key markets,\u201d writes DePratto in a recent TD Economics report on the prospects of a Canadian recession.<\/p>\n<p style=\"text-align: justify;\">These fundamentals include strong population growth, a key driver of housing demand. In fact, Canadian population growth reached new heights last year, and the federal government continues to set historically high targets for future immigration.<\/p>\n<p style=\"text-align: justify;\">\u201cSecond, the change in tone from both the Bank of Canada\u2026 provides some additional market sentiment support in the form of lower than previously expected borrowing costs,\u201d he continues.<\/p>\n<p style=\"text-align: justify;\">The central bank has been gradually increasing its policy rate, which influences mortgages, since summer 2017. But appears poised for a less-aggressive approach this year in the face of weaker-than-expected GDP growth.<\/p>\n<p style=\"text-align: justify;\">Growth of 1.2 percent had been forecast for the fourth quarter, but the economy ended up expanding by 0.4 percent over that period, notes Capital Economics, an economic research firm.<\/p>\n<p style=\"text-align: justify;\">\u201cOn the basis of this latest set of woeful GDP figures, the Bank of Canada must surely be considering following the [US] Fed and abandoning any talk of further interest rate hikes at\u2026 [the next] policy meeting,\u201d writes Paul Ashworth, the firm\u2019s chief North American economist, in a note.<\/p>\n<p style=\"text-align: justify;\">When the Bank of Canada makes its next rate announcement on March 6th, it is widely expected to stand on the sidelines and leave the overnight rate untouched at 1.75 percent.<\/p>\n<p style=\"text-align: justify;\">Higher interest rates increase the cost of homeownership, so naturally stalling further gains \u2014 many observers are still calling for one hike in the second half of this year \u2014 or cutting rates creates a more positive climate for real estate markets across Canada.<\/p>\n<p style=\"text-align: justify;\">\u201cThe outlook is for modest activity that leaves less of a growth-cushion in the event of a negative shock, but growth nonetheless,\u201d writes TD\u2019s DePratto. \u201cLess buffer alone does not a downturn make, and as it stands, the situation in housing markets points to elevated risks, not to a downturn.\u201d<\/p>\n<p style=\"text-align: justify;\"><a href=\"https:\/\/www.livabl.com\/2019\/03\/demand-borrowing-costs-canadian-housing-market.html\" target=\"_blank\" rel=\"noopener noreferrer\">Demand &amp; Borrowing Costs are Keeping The Canadian Housing Market from Crashing This Year<\/a> by Josh Sherman | Livabl<\/p>\n","protected":false},"excerpt":{"rendered":"<p>An economist with one of Canada\u2019s biggest banks says the country\u2019s real estate market is \u201cset for a slog\u201d this year, but nothing worse. TD Senior Economist Brian DePratto outlines &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2019\/03\/demand-borrowing-costs-are-keeping-the-canadian-housing-market-from-crashing\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-11877","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Demand &amp; Borrowing Costs are Keeping The Canadian Housing Market from Crashing &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2019\/03\/demand-borrowing-costs-are-keeping-the-canadian-housing-market-from-crashing\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Demand &amp; Borrowing Costs are Keeping The Canadian Housing Market from Crashing &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"An economist with one of Canada\u2019s biggest banks says the country\u2019s real estate market is \u201cset for a slog\u201d this year, but nothing worse. 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