Housing looks lacklustre in 2011: report
Housing looks lacklustre in 2011: report
Canada had one of the better performing housing markets in 2010, according to a Scotia Economics year-end review, though the outlook for 2011 anticipates a fairly lacklustre year.
Scotia's Global Real Estate Trends report tracked housing in 12 advanced nations, and found that Canada was one of six countries this year where inflation-adjusted home prices increased.
The report however, also found that this country's housing market was one of the most volatile. Factors such as the introduction of the harmonized sales tax in Ontario and British Columbia, expectations of rising interest rates, and changing criteria for mortgage lending all played a part in the volatility.
"Overall, we anticipate a fairly lacklustre year (in 2011) for residential housing, with modestly higher sales volumes and flat inflation-adjusted prices," said Adrienne Warren, senior economist for Scotia Economics. "The bigger risk likely awaits 2012 when more significant interest-rate increases, combined with record high home prices, will notably strain affordability.
Although Canada had one of the stronger housing markets in the report, Australia came out on top. Demand in that country was supported by low unemployment and a tight housing market that kept pressure on prices.
But even housing in Australia is cooling. A grant for homeowners expired earlier this year, while two consecutive interest-rate hikes from the Reserve Bank of Australia has added pressure on new homebuyers.
"We anticipate a further slowing in sales and price appreciation in 2011," Warren said. "While Australia's close trade ties with Asia and resource wealth will continue to underpin a solid pace of domestic activity, higher interest rates will worsen already strained affordability."
The housing situation however looks far less rosy for other countries in the survey. Ireland, Italy, Japan and Spain all saw housing prices fall for 2010, and next year isn't looking much better. Scotia Economics expects prices to continue to fall in those markets, or to remain flat.
A surprise finding was that the German market, which was flat for 2010 and has been in a slump for the better part of the decade, may finally be starting to recover. Private sector data suggests that export-driven growth in the country, which has bolstered employment and confidence, may be extending its gains to the housing sector.
"Along with Japan, Germany's population is not only aging, but shrinking. Meanwhile, its home-ownership rate, at roughly 45 per cent, is among the lowest of high-income nations."
© Copyright (c) The Vancouver Sun
Read more: http://www.vancouversun.com/business/real-estate/Housing+looks+lacklustre+2011+report/4025862/story.html#ixzz19Wuj1UHY
Canada had one of the better performing housing markets in 2010, according to a Scotia Economics year-end review, though the outlook for 2011 anticipates a fairly lacklustre year.
Scotia's Global Real Estate Trends report tracked housing in 12 advanced nations, and found that Canada was one of six countries this year where inflation-adjusted home prices increased.
The report however, also found that this country's housing market was one of the most volatile. Factors such as the introduction of the harmonized sales tax in Ontario and British Columbia, expectations of rising interest rates, and changing criteria for mortgage lending all played a part in the volatility.
"Overall, we anticipate a fairly lacklustre year (in 2011) for residential housing, with modestly higher sales volumes and flat inflation-adjusted prices," said Adrienne Warren, senior economist for Scotia Economics. "The bigger risk likely awaits 2012 when more significant interest-rate increases, combined with record high home prices, will notably strain affordability.
Although Canada had one of the stronger housing markets in the report, Australia came out on top. Demand in that country was supported by low unemployment and a tight housing market that kept pressure on prices.
But even housing in Australia is cooling. A grant for homeowners expired earlier this year, while two consecutive interest-rate hikes from the Reserve Bank of Australia has added pressure on new homebuyers.
"We anticipate a further slowing in sales and price appreciation in 2011," Warren said. "While Australia's close trade ties with Asia and resource wealth will continue to underpin a solid pace of domestic activity, higher interest rates will worsen already strained affordability."
The housing situation however looks far less rosy for other countries in the survey. Ireland, Italy, Japan and Spain all saw housing prices fall for 2010, and next year isn't looking much better. Scotia Economics expects prices to continue to fall in those markets, or to remain flat.
A surprise finding was that the German market, which was flat for 2010 and has been in a slump for the better part of the decade, may finally be starting to recover. Private sector data suggests that export-driven growth in the country, which has bolstered employment and confidence, may be extending its gains to the housing sector.
"Along with Japan, Germany's population is not only aging, but shrinking. Meanwhile, its home-ownership rate, at roughly 45 per cent, is among the lowest of high-income nations."
© Copyright (c) The Vancouver Sun
Read more: http://www.vancouversun.com/business/real-estate/Housing+looks+lacklustre+2011+report/4025862/story.html#ixzz19Wuj1UHY
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