Many factors affect the real estate market in Canada. These factors are always changing, and they can be overwhelming at times. They can either push the prices downward or upward. This is why the prices of houses or property keep on varying from time to time. These following are the main factors affecting the real estate market in Canada.
These are the biggest determining factors that influence the housing market in Canada. The Bank of Canada controls these rates. This is the institution that determines rate used by lenders and banks when they are calculating interest rates on mortgages, refinancing, home loans and second mortgages. There is a high demand for mortgages offered by lenders at low rates. The rates charged by this bank have been going down over the last few years. Probably this is the main reason why the housing market is booming in Toronto and other cities in Canada.
Since the recession that was experienced in the 90s, the Canadian government has been taking action to support the real estate/housing market. This has also boosted the demand for homes. It has been taking actions through monetary policies. These rates have been low since 2008 when the other recession was experienced. The government has also set up other regulations to ensure that demand is at a manageable and reasonable level.
This is another factor that is closely related to interest rates. Low interest rates lead to high demand. Consumers are interested in low interest loans. Demand is also affected by demographics during certain periods. For instance, it has been predicted that older generations like baby boomers are likely to stay for long in their homes. Young people and immigrants will continue fuelling the market in future.
Migration to cities
Population growth and immigrants mainly support the Toronto’s housing market. It is estimated that about 75,000 immigrants come to this city every year. Again, there has been a high population growth rate over the last two decades. This has, in turn, led to the high demand in the housing market. High demand in the market can quickly or easily skew the housing prices. Even as the population growth continues increasing, the federal government has been softening it by imposing new regulations. Home prices are dramatically affected by the demand. Demand will be very high when you have many new home buyers.