TD’s newest provincial economic update has the prospects for economic growth revised downward for 2012 due to risks in Europe, the lagging economic recovery in the US, and slowing growth in China and emerging markets worldwide.
You can read that entire report here, but I wanted to focus on the housing markets detailed within.
Here’s what TD had to say, and notice the regional differences again across the country (with Montreal now getting the dubious distinction of being in the same sentence as TO and Van):
While all provinces are likely to bear some of the impact of stricter federal mortgage lending rules and of a gradual increase in interest rates, urban markets in Toronto and Montréal are poised to see larger than average declines, while Vancouver’s correction this year still has room to run.
At the other end of the spectrum, housing markets in the three Prairie provinces are expected to remain largely unscathed. The varying residential market conditions will exacerbate growth differentials given that housing is a large driver of consumer spending.
Below are some provincial housing highlights:
The vast majority of signals on the economic dashboard are sending the same message: things are good. Wages, already the highest in Canada, are rising, retail sales are growing fast thanks to an expanding population, and the housing market shows little sign of overvaluation relative to other large provinces in Canada.
Fuelled by growing personal income, retail sales will likely accelerate and the housing market, already one of the steadiest in Canada, is expected to buck the national trend in 2013, with sales increases.
Formerly red-hot Vancouver appears to be going through a long-awaited correction. So far this year, resale prices in Greater Vancouver and Victoria have declined 7% and 11% respectively, and sales by 31% and 17%. While significant, such price declines hide a shift within the market from higher-priced to lower-priced homes. TD doesn’t anticipate that the market will continue to decline in a straight line over the next few years, however a further moderate downdraft in both sales and prices is likely in store over the medium term.
The housing market will go through a gradual correction, with prices in the Greater Toronto Area market in particular poised to lose more than the national average
The housing market is expected to start a gradual adjustment in the near term, similar to markets in several other provinces.
Download the entire report here