Unemployment, Lower Immigration Restrains Canadian Housing
Canadian house prices will rise at a much slower pace this year than predicted will fall in 2021 as the coronavirus pandemic pushes up unemployment, curtailing immigration and the demand for homes. Lockdown restrictions to stop the spread of the virus, which has infected over 100,000 people in Canada, have disrupted supply chains in the resource-heavy economy. Despite aggressive interest rate cuts from the Bank of Canada and emergency government spending, including help to furlough workers during lockdown, the economy is in its deepest recession on record. While Canadian home prices rose 0.1% in the month of May, yielding the strongest annual gain in two years, the June 9-23 poll of 17 economists and housing market analysts showed average house prices across the country would rise just 1.5% this year compared with the 4.5% forecast in a March poll. Buyers fearful for their economic future are less likely to make big-ticket purchases, pressuring sellers to lower prices. Unemployment hit a record high of 13.7% in May and may rise more as businesses plan their future. In a worst-case scenario, Canadian house prices were forecast to tumble 8.0% this year. Next year, national house prices are forecast to fall 1.2%, compared with a 3.5% rise predicted in March.
Tags : INTERNATIONAL economy pandemic unemployment Lower Immigration Canadian Housing