Canada's National Housing Agency predicted that building would increase this year and next, thus keeping increasing house prices down. An activity increase in the housing building industry happened during the last two quarters of 2009, ending with a total of 149,081 starts. The estimates for this year are already looking between 152,000 and 189,300, and next year's estimates are reaching over 200,000.
The housing cycle of building, selling and buying works together, when there is too much of one thing, or not enough of one thing, collapse occurs, which is what happened when too many loans were given to people that couldn't afford them. Canada feels the improved balance between supply and demand will keep prices down when the economy starts looking up.
“Canadian housing markets will benefit from improving economic conditions and low mortgage rates,” stated Bob Dugan, CMHC's chief economist. “As well, measures recently announced by the Government of Canada to support the long-term stability of Canada's housing market will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home.”
All lenders and banks are nervous about causing the same problems that caused the housing market to crash in the first place, but lending has to start somewhere for the market to get back on track. Independent mortgage lenders feel they're the ticket to keep things from undergoing a large bank monopoly where restrictions and guidelines would hinder loan approvals.
According to the Canada Real Estate Association, the average price of a home was $328,537, which is a 19.6 percent increase from last year. Some analysts even feel their market has switched from a buyer's market to a seller's market. There are less listings and more buyers. The country also has a better handle on foreclosures than the U.S.
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Written by Amy Munday
Huliq.com
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