Most major Financial Companies would concur, a stump in the housing market is not the worst news you can hear, depending what you are in the market for. Young/first time home buyers will be on the winning end of this market, seeing as how real estate is priced lower, they can save up for a down payment for their dream house quicker. This can also be the case for retired individuals who want to move into a smaller, more affordable place. Now, more than ever, does this seem like an accessible idea.
This not only benefits young home buyers and the retired population but new comers to Canada as well. Since a city like Toronto has many immigrants, their dream homes may be out of reach. But now their dream of owning the perfect home is one step closer with these current trends. However, as we know, this will have a negative impact on the economy. When there is no housing being sought out, other sectors suffer as well. This is said to be true to the retail industry, such as home furnishing and appliance stores. In accordance with these specific retail industries, the overall retail industry will suffer. This is because the baby boomer population that is looking to retire soon cannot sell their homes with the current market if they are looking to down grade. Therefore less money will be spent overall from the baby boomers because they need to hold onto every cent. This is because, based on trends, they would not be able to sell their property quickly.
However, economists do not predict the Canadian housing market is heading for the same fate as the U.S. and Ireland. Dropping prices in the housing market was not the reason behind those crashes, more so individuals defaulting on their mortgages. Canada has recently ramped up mortgage laws with the new B20 rules, making sure the individual is able to pay their mortgage based on income and assets.
Even though there is negative wraps with the cooling housing market, this can be viewed as a positive note. Since the U.S.’s economic crisis came from high housing costs and high interest rates. By Canada having a cooling down housing market, one could argue that this puts us at an advantage and gets us avoiding a big depression in the economy. It also makes it more viable for affordable housing with lower prices and lower interest rates. This proves for a win-win situation.
Based on these findings, it is doubtful that Canada will crash like the housing market in the U.S. and this news definitely does not hurt for the young, first time, immigrant, and retired home buyers.