As the economy slows down during the pandemic, there are still some people claiming the real estate prices will go up. The head of CMHC, Canadian national housing agency, is warning the homebuyers and homeowners to exercise caution and question motivation for such claims. There are several factors that put bold statements like that in doubt. The growth of the Canadian economy was slowing down even before the pandemic. The number of applications for emergency income support skyrocketed in April. On the real estate market, it is estimated that 12% of insured mortgages are in some form of payment deferral, with number of such mortgages expected to hit 20% by this fall. All these factors point to a low likelihood that housing prices will increase in the short to intermediate term.
- economic growth before the pandemic started wasn’t very impressive either
- GDP growth in Canada has been trending downwards since the year 2017
- people began trading oil at a negative price, which wasn’t thought possible before
“Canada’s economy has been slowing in growth for a few quarters, even before the pandemic. It got much worse after the economic lockdown. Stat Can reported GDP fell 2.11% in Q1 2020, when compared to the previous quarter.”