Canadian Real Estate Market Update

By: lexorleslie


As the housing market in Canada continues to florish, some negative thinkers are predicting its demise. Large household debt in relation to income has many people concerned that what happened in the United States of America could happen in Canada. Home prices in Canada are overvalued by as much as twenty five percent. True or False? False is what the factors in Canada relate to.

It is a fact that todays consumers are borrowing at higher levels. An example of this is the ratio of household debt rose tremendously over one hundred forty nine percent. However, most economists feel that the Canadian housing market will remain stable and will not have the same negative consequences as the United States.

One of the most important differences is our mortgage lenders in Canada are much stricter than our neighbours in the United States. For example in Canada the mortgages are full recourse loans which essentially means the borrower is fully responsible for paying back monies loaned regardless of situation. Lenders are able to utilize the borrowers assets and income to pay off loan. Additionally in Canada we tend to seek mortgage options more conservatively than our United States counterparts. As well currently the mortgage interest rates are the lowest they have ever been. Canadian consumers can get a mortgage at a 2.99 percent interest rate with a four year term. Absolutely amazing savings and possibilities especially for first time buyers. Rates are also not likely to increase until 2013 and even then the rates are still thought to be at a lower rate that most Canadians could hope for.

Great interest rates combined with tight mortgage guidelines will defiantly keep Canada on the right tract. Hence the Canadian housing market is very healthy and will continue to thrive. Invest in Canadian real estate, it is a great time to buy real estate in Canada.

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