Below is the latest release from TD on the stats for housing.Prices are expected to move lower, not the bubble range that everyone is trying to make happen. The fundamentals are good in Canada and we are seeing very normal market conditions in today's mortgage and housing environment.
TD predicts house price drop in 2011
Bank says interest rates rising faster than expected
Last Updated: Wednesday, May 5, 2010 | 2:25 PM ET Comments68Recommend32
TD bank on Wednesday revised its forecast for annual average house prices nationally next year, and is now calling for prices to fall from 2010 levels.
Existing home sales price forecast, 2011
Thousands $ Annual change
Canada 339.7 -2.7 %
N.L. 228.5 -2.0%
P.E.I. 142.5 -0.3
Nova Scotia 209.0 -1.4
New Brunswick 157.0 -0.6
Quebec 239.7 -1.0
Ontario 346.0 -3.0
Manitoba 216.0 0.5
Saskatchewan 245.0 1.2
Alberta 357.0 0.6
British Columbia 483.0 -3.4
Source: TD Economics
TD Economics predicted in December that prices would rise 1.6 per cent next year from an average in 2010 of $349,000. It has changed that forecast to a drop of 2.7 per cent to $340,000.
TD said yields on Canadian government bonds — which underpin mortgage rates — have risen faster than expected. It also has changed its view of when the Bank of Canada will start raising interest rates, to June 1, from its earlier prediction of July 20.
That, it said, will cut into sales by next year by between 10 to 12 per cent and lead prices lower.
It predicted the greatest pullback would be in British Columbia, at 3.4 per cent, and Ontario, at three per cent.
The bank in its latest report kept its prediction for the number of units sold this year nationally at 475,000.
But it predicted sales in the first half will be higher than it earlier expected, as buyers move to get ahead of rising interest rates and increased costs in Ontario and B.C. with the introduction of the harmonized sales tax, and to fall below its previous forecast in the second half.