Factors Affecting the Price of Home in Canada
Many factors affect the real estate market in Canada and other parts part of the globe. This is something that affects both the buyers and sellers. The Canadian real estate market in Canada has been booming for the last few decades. This is what has attracted many investors in this sector. It has also contributed to the immense growth of the Canadian economy. Let’s have a look at the main factors affecting the real estate market.
The interests rates of the Federal Reserve
The American and Canadian central banks have different interest rates. However, the rate set by the Federal Reserve in the United States has a huge impact on the mortgage rates in Canada. Most of the mortgage lenders in Canada are known for taking their cue from New York’s global bond rates. Homebuyers are always looking for the low interest rates. If you charge them a lot of money, then they would opt to get the same amount of money in the safe bonds. The mortgage rates are expected to be a bit high in the coming years because the Federal Reserve has already increased the interest rates.
These buyers have a direct impact on the Canadian domestic market including the real estate market. There has been a slight decline in the number of foreign buyers, especially in Asia. This is something that is likely to affect the process of houses in the major cities in Canada. Many investors from China have invested in this country. A fall in the Chinese currency is also likely to affect the real estate market in Canada.
A rise in the interest rates, as well as the weakening of the Canadian Economy, can put off people from buying properties. For instance, the Canadian Economy has slipped from the tenth place to twelfth in 2017. It is now lagging behind that of Indonesia and South Korea. However, it is projected to improve due to the resurgence in the gas and oil industry. A reduction in the number of the domestic buyers is more likely to put downward pressure on the Canadian real estate market.
The government has been putting certain measures to control the changes that take place in the real estate market. This is something that has been taking place at both the provincial and federal levels. Some of the investors have been blaming the government for the unaffordable prices of property.