Political, economic risks cloud Canada’s housing market outlook
CREA’s forecast singles out Ontario as the only province expected to post annual sales growth this year, but that’s by no means a surefire bet. “There’s clearly an assumption that things will start to increase year over year for the rest of the year – but I just don’t necessarily see why that would be the case, or any different than the rest of the country,” Fox said.
The US-Iran war has also stirred speculation about a possible Bank of Canada interest rate hike in the months ahead to combat inflationary pressures, another development that would likely mark a negative step for the national housing picture.
But while that could keep homebuyer sentiment subdued in Canada, Fox doesn’t see the current gridlock lasting forever – and said buyers will eventually realize there’s no perfect time to enter the market.
“The only way we get past that [chaos] is if it becomes so normalized in people’s minds that they stop worrying about it, and just power through that economic uncertainty and choose to participate,” he said. “I don’t think that’s going to happen this year, but I think it’s on the horizon because it has been so long and it really feels like it’s becoming the new norm.
“You have lots of people sitting on the sidelines choosing not to participate right now and trying to wait things out. Eventually they’re just going to say, ‘This is how it is and I can’t hold back any longer.’”
