In the midst of global economic uncertainly, residential property markets around the world are cooling off, according to a Scotia Economics’ Global Real Estate Trends report released this morning.
“Some slow-down in the pace of economic activity, some of the worries over debt issues and the like and volatile financial markets have dampened consumer confidence and that’s just spilling over to the housing market, despite the fact that interest rates are still exceptionally low in most countries,” said Adrienne Warren, senior economist and real estate specialist at Scotia Economics.
Compared with the global situation, Warren said Canada is an “outperformer,” but that it’s not immune to the cooling off in the past couple of quarters this year.
“[Canada] is more moving into a situation where we’re looking at flat sales and pricing as opposed to the falling markets that we’ve been seeing in a number of markets – in particular the U.S. and some of the harder-hit countries in Europe.”
Warren noted that Vancouver’s real estate market isn’t necessarily in line with the rest of the country. On the national front, however, she said that the real estate market is likely to continue to slow down in the coming months.
“Our best guess is that over the next six months or so we’re going to see a fairly modest pace of economic activity and still a fairly high degree of economic uncertainty, which will probably weigh on housing sentiment to some degree.”
With ongoing low interest rates, labour markets will be the indicator to watch for housing demand, she said.
“Now we’re beginning to see a few signs that businesses are becoming a little more cautious in the pace of hiring,” she said. “I think if hiring labour markets hold up fairly firm, then there will still be some demand out there; we’ll just keep watching the labour market.”
Jenny Wagler
Twitter: JennyWagler_BIV