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The outlook for Canada’s economy and housing market is challenging, with more difficulties likely before any improvement.
The recent Bank of Canada rate cut has sparked optimism in the real estate industry, with many predicting a surge in demand and prices. However, I am skeptical. Current economic conditions don’t support a strong housing market rebound. Recent data shows that the number of households in Ontario severely delinquent on their mortgages has exceeded a billion dollars, doubling pre-pandemic levels.
Housing analyst Ben Rabidoux recently highlighted that mortgage delinquencies typically rise after the first rate cut, as it takes 18 to 24 months for the full impact of higher rates to be felt. Although the percentage of delinquent mortgages is still low, the increasing trend is worrying. Mortgages are often the last debt people default on, indicating significant economic stress when delinquencies rise.
The condo market is under particular pressure, with many investors listing their properties to reduce debt. While in most cases these properties are not underwater, the challenge lies in servicing the debt at high-interest rates. This has led to a record number of condo listings.
#torontohousing #torontorealestate #torontorealestatemarket
27 сен 2024
