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Canadian Homes are Overvalued of About 20%

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Based from a US Financial Agency called Fitch Ratings, the real estate market in Canada is overpriced of about 20 percent and is warning the government that it may need to slow down on borrowing money on homes. The financial agency is warning the government as it is projected that in the next years, the prices of Canadian homes may increase to around 30% if not controlled while it is still possible.

 

Aside from the mentioned financial agency, there are also different financial agencies that are sending alerts to the government about the situation. In different cities, the prices for homes increased in different percentages yet most are seen to have increased from the usual prices that are recorded from previous years.

 

The home prices in Calgary have increased about 8.1% as compared to what the prices were last year. In Hamilton, the prices were increasing for about 7.3% while in Vancouver and Toronto has climbed for around 6.1%. Though there were notable changes with the prices in these cities, there are also different places in Canada where the real estate market is showing a cooling trend.

 

Given that the prices in homes are starting to increase, the government responds to this problem by tightening the rules in mortgages and other lending practices. However, as based from what Fitch ratings see, these efforts of the government are seen not effective in controlling the moderate growth in home prices.

 

Currently, home prices are seen to defy gravity continuously even the interest rates given are so low. Though there is much effort exerted by the government in helping home buyers to take advantage of lower home prices, many are still hoping that the home prices will get back to its normal prices or just go lower through the coming years instead of its current situation.

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