The Conference Board of Canada is claiming that 1 in 5 families in this country struggle to afford the home they live in foregoing healthy food and recreational activities. That’s at a time of record low interest rates. With the central bank saying they’ll raise rates soon and major banks raising mortgage rates already, what does the future of house prices look like in this country?
The Canadian housing market in general and the Vancouver housing market in particular has been on a huge run for years, but is our unstoppable housing market on the verge of collapse?
Canada’s unstoppable housing market faces a challenge. To stay unstoppable, it needs mortgage rates to remain low and affordable. But to keep setting new sales records, it also needs more people to land more jobs so they can afford to buy more homes.
The problem is it’s next to impossible for the economy to produce both these happy outcomes. Interest rates usually stay low only if unemployment remains high. Once jobless numbers start falling, mortgage rates typically shoot upward. Hoping for both low interest rates and lots of jobs is like a farmer praying for both dazzling sun and buckets of rain.
