world trend: Buyer confidence increases
Province
The housing market was the leading edge of the economic meltdown, and now signs that the global market is stabilizing could signal a broader economic recovery, according to a report released Thursday by Scotia Economics.
There are “tentative but growing” signs that housing markets are stabilizing in Canada and internationally, says the Global Real-Estate Trends report from Scotia Economics, which looks at the trend in 10 developed countries.
Home prices are increasing in some countries in the second quarter, including Canada, Australia and the United States, and while they’re still falling in others — the U.K., France and Spain, for example — the rate of decline is slowing, said Adrienne Warren, a senior economist with Scotia Economics.
While prices are still lower than they were this time last year, “even a stabilization in housing prices, demand and construction would be highly supportive of a broader economic recovery, particularly as the near-term fuel provided by government stimulus spending and inventory rebuilding begins to fade,” the report says.
“Home ownership is a crucial sector of national economies and an important source of wealth for many households, influencing spending, saving and borrowing decisions,” said Warren. “It also has significant spillover to other domestic industries, including retail sales, finance and insurance, and a range of professional and household services.”
Record-low interest prices, homebuyer tax incentives and lower housing prices are spurring a revitalized demand, the report says, but there are still obstacles to a more solid recovery — continued uncertainty in the labour market makes people more cautious about borrowing and banks are still cautious about lending.
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