I am often asked by clients whether the housing market will stay strong or whether it may slow down or even potentially crash due to the European debt crisis. Curious to learn more and to help better inform our clients, I did a little research on the subject and found what the leading experts had to say.
According to economist Douglas Porter at the Bank of Montreal, the housing sector is expected to remain quite solid for the foreseeable future, mainly due to low interest rates[i], which will remain at their current record-low levels for quite some time[ii]. In terms of price levels, they are expected to rise by a modest 2% this year in Montreal and Toronto[iii].
Other factors that bode well for the housing market include: population growth due to high levels of immigration, an influx of buyers from generation’s X and Y, the ever-increasing lifespan of baby boomers and retirees, as well as an insufficient number of rental properties to meet current demand [iv].
In addition, the volatility of stock markets in recent years has further convinced people to invest in safer securities and investments, such as real-estate[v].
All in all, predicting the future is a sensitive and difficult issue. However based on the expert opinion mentioned above, as well as the fact that the Quebec real-estate market has remained quite stable over the past decade, I remain confident that the market in Quebec will remain in good shape.
And you? What do you think about the fate of the real-estate market for this coming year? What’s higher, your confidence or your appetite for risk?
[ii] Patrice Groleau, Marché Immobilier 2012, Condo Montreal, Condo à vendre Montreal –McGill Immobilier p.2
[iii] Eric Jolander, Analyse du marché, Conseils aux acheteurs, Conseils aux vendeurs Immobiliers. P.1