Demographic trends taking hold
Province
OTTAWA — An aging Canadian population and increasing immigration will bring significant changes to the country’s housing market, a report released yesterday suggests.
Short-term cyclical factors will slow Canada’s hot housing market over the next several years, according to the latest Real Estate Trends from Scotia Economics, while long-term fundamentals, including slower population growth, will dampen demand.
According to the report, the average annual rate of population growth will slow to just 0.8 per cent over the coming decade, reflecting an aging society and historically low fertility rates.
“This less-favourable demographic trend does not in itself pose a major risk to the housing outlook,” said Adrienne Warren, senior economist with Scotia Economics.
“Real household-income growth and the level of interest rates have a statistically more significant influence on housing sales and price appreciation.”
Yet the moderation in housing demand comes as affordability is at a cycle low, supply conditions are better balanced and pent-up demand has largely been met, potentially reinforcing the industry’s more subdued prospects, the report suggested.
A slowdown would follow a booming market that has shown little signs of abating for years.
The Canadian Real Estate Association recently reported that the average resale price for agent-listed homes in Canada surpassed $300,000 in April for the first time ever, with record highs in seven provinces.
The seasonally adjusted sales rate in April was also a record, up 0.6 per cent from the previous record set in January. Year-to-date sales were also at a new high, 6.7 per cent more than last year, it added.
© The Vancouver Province 2007
