Matt Kieltyka
Other
The Conference Board of Canada says fears of the real estate market bursting its bubble in Vancouver are overblown.
The board’s initial housing briefing, released Monday, shows that the sales-to-new-listings ratio rose sharply throughout 2013, with housing prices growing at an “unsustainable” rate.
But the chance of a market crash, and subsequent pricing correction, are slim.
Instead, the report suggests prices will continue to grow at a slower rate.
“The housing market may be undergoing a correction in some regions and market segments, but it is more likely to be a soft landing than a bubble bursting,” said Robin Wiebe, senior economist for the Centre of Municipal Studies, in a statement.
The board’s report says most of the housing bubble fears centre around the price of homes, while it believes comparing mortgage to rent payments are a better indicator of affordability.
“Mortgage costs, not just house prices, are the principal deciding factor for potential homebuyers,” said Wiebe. “Mortgage rates are expected to rise this year, but not dramatically, because the Canadian economy remains in a slow-growth mode.”
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