By Farhaneh Haque
After much ado, U.S. Congress reached a deal in the knick of time to avoid the fiscal cliff and alongside ringing in 2013, Canadians breathed in a sigh of relief. The cliff was a series of automatic tax hikes and spending cuts that threatened to push the U.S. and Canadian economies back into recession.
From a Canadian perspective, this agreement was mostly a positive development, at least from a short-term perspective. It partially lifts the cloud of uncertainty that contributed to the weak pace of economic growth here in Canada over the second half of 2012.
So what will all this mean for real estate buyers & sellers in Canada? While there is no crystal ball and no one can accurately predict the markets, TD Economics expects the resale home sales and price to decline in the order of 10% over the next 2 to 3 years. They add that the adjustment is unlikely to occur in a straight line; rather they expect continued near-term weakness in the housing market as the recent tightening in mortgage insurance rules continue to temper housing demand. However, these measures often prove to be temporary and they expect average prices and sales are likely to stabilize by 2013 as low interest rates support demand which likely means that most of the unwinding of the overvaluation should occur in 2014-2015 as interest rates start to edge higher.
To read more about the TD Quarterly Economic Forecast click here
About the Author
Farhaneh Haque is the Director of Mortgage Advice with TD Canada Trust, a leader in residential real estate mortgages and home equity lines of credit. With over 18 years of lending experience, she is entrusted with the responsibility of offering mortgage advice to help Canadians make informed decisions about home financing and ownership.
Farhaneh and her team draw upon research commissioned by TD Canada Trust, which reveals consumer attitudes and behavior related to home ownership such as choosing and buying a first home, renovating and greening a home, as well as understanding gender, regional and other demographic preferences. They also have access to proprietary research from TD Economics on topics such as Canadian interest rate forecasts and Canadian housing market insights
In her personal time, Farhaneh is an active member of community groups promoting youth education; in particular helping high school students in securing funding to pursue post secondary education.