Despite the pandemic, financial uncertainty and rising unemployment, real estate prices in Canada continued to climb in April, according to the TNBC house price index. Despite the price increase, Canadian banks warn that this trend may be reversed in the near future. It is also worth considering that the TNBC house price index uses land registry data for their reporting, which inherently has a lag built in its mechanism. Therefore, this index for April is truly an indicator of sentiment that was prevalent in March. Trailing back a year ago, according to this index the real estate prices increased 5.27%. Six out of eleven major Canadian cities are at an all-time high level for real estate prices. With increasing unemployment and economic downturn, experts warn that the loan defaults can rapidly increase, leading to market over-supply and falling real estate prices.
- While some trends show real estate prices going up, that’s reflective of the time just before the pandemic.
- Many markets are showing new high prices, but the coming recession is likely to change that.
- Factors like unemployed people unable to pay their mortgages are soon going to have an effect on the market.
“The index for Toronto showed one of the biggest gains across Canada. The index increased 1.99% in April, and is up 8.19% from last year. The monthly increase was second only to Ottawa, and puts the index at a new all-time high for prices.”
Read more: https://betterdwelling.com/national-bank-of-canada-real-estate-prices-rise-but-could-change-with-the-recession/