While Canada’s hot housing market also has begun to cool, it remains a notable outperformer according Scotia Capital’s Global Real Estate Trends Report released today.
Of the nine major developed markets that Scotia Capital tracks, only three registered positive year-over-year (y/y) real price growth: Canada, France & Switzerland.
Regarding Canada the report states:
Canada’s housing market stands out in its resilience and longevity. Average inflation-adjusted existing home prices were up 5% y/y in the April-June period, on par with the first-quarter’s pace of appreciation. Data for July and August point to continued firm but stable sales through the late summer, alongside a levelling out in prices.
Ultra-low interest rates will continue to support affordability in the face of record high prices. Nonetheless, heightened economic uncertainty combined with recent signs of a loss of momentum in Canada’s jobs market could keep some potential buyers on the sidelines for the time being. On balance, we anticipate a modest slowdown in the volume of sales transactions heading into year end, alongside relatively flat prices.
In the US, the average inflation-adjusted home prices fell 6% y/y bringing the cumulative decline since late 2005 to about 30%. Despite near record affordability, a persistently weak job market and fragile consumer confidence are preventing any pickup in sales outside of investor-driven distressed properties.
The lower prices have spurred Canadians to purchase US real estate in large numbers. According to NAR, Canadians, including recent immigrants to the US & temporary visa holders, purchased US$19 billion in US residential property in the 12 months to March 2011. This represents almost 25% of all foreign purchases of US property over the period, by far the largest share of international transactions.
You can read the entire report here