In May, Scotia Bank released the new housing trends for the 1st quarter of 2008. New figures show that the real estate market is cooling down after seeing phenomenal numbers in 2007. Resale of homes have fallen 15% which is down from last summer and the average resale home price in Canada had its first quarterly decline in the first quarter of 2008.
Canada also saw a decline in residential building permits in comparison to last year and the inventory of unsold new homes are trending higher. Some factors causing the decline in these first quarter numbers include the relentless weather that we experienced throughout the winter season along with limited demand for the increased supply.
Financial experts expect a 15% decrease in overall sales compared to 2007. However, with that being said they do expect the average price of a home will increase by approximately 5%. It is safe to say that that the Canadian home market is still in a good position since homes are not overvalued and home equity as a share of real estate assets is near a record high.
Even though experts are expecting a bit of a slump our mortgage quality is still sound. Lending institutions have maintained conservative loan criteria and have introduced a new range of products such as no down payment, longer amortization periods, and adjustable mortgage rates. In my next post we will talk about some of these new mortgage products that are available to home buyers.
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