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A big surprise, the property market rebounded sooner than anyone expected. In the spring of 2009, Canada saw the about face of the real estate market, we observed sales figures continuing to shoot up in the following months. When we examine the winter months we notice an even greater increase with reports of over a 100% jump. Not only did the figures bounce back but the usual price overtook the pre-crash figures. There are a few reasons, why the Canadian housing market did (and and is still doing) better than most of the world's real estate markets. The first reason is possibly due to the exceptionally low interest rates implemented by the Bank of Canada at 0.25%. This low rate benefited the Canadian real estate market and even though the US endeavoured to do the same thing, they didn't see the same results: The Canadian mortgage business was not as ruined with sub prime mortgages as the US market. Canada gave these subprime loans to between 5 and 10% of the country, unlike the US who's subprime loan market was a gigantic 22%. Canadian banks are over and over again ranked as the solid in the world by the World Economic Forum. The way the banks and other financial institutions dealt with the depression is another reason why Canada deflected the credit crunch for the most part. Though jobs were lost and the unemployment figures increased, the figures were not as bad as they were in the US and recovery has been seen since Summer 2009. Personal bankruptcies are smaller due to the social setup in Canada To sum up, the Canadian real estate market is on a solid footing. Unluckily with news this good people are starting to mutter about the prospect of bad news, in the not so distant future, for the housing market. I don't consider this is the way forward, for several reasons. The interest rates are looking good, with a promise from the Bank of Canada to keep the rates even for another few months. As this date approaches, most specialists think we will begin to see rates increase, and most of the Canadian banks have already started inching up mortgage rates. Likewise despite not having an official finish date, the window for taking advantage of the First-Time Home Buyers' Tax Credit is slowly shrinking. Since the autumn 2009 we have seen a failure of new listings on the real estate market this is no longer the issue. As Jay Banks from Vancouver Lofts, adds: "Over the last few months, the real estate market has seen an increase of new listings on property agent's books, which has steadied the situation." Putting all these factors together, I firmly trust in the second half of this year, we will see house prices starting to level off and the market finally slowing down.
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