RBC sees sluggish start to Canada's spring housing market
BNN Bloomberg
Canada’s largest bank is expecting a slow start to the spring housing market as higher interest rates keep many buyers out, despite a drop in prices.
“It’s sunny outside, but I don’t think just because it’s sunny, you’re going to see a real spring-back in mortgage originations,” Neil McLaughlin, head of personal and commercial banking at Royal Bank of Canada, said at a conference Wednesday.
The benchmark home price is down about 16 per cent in the past year in Canada, but at $704,000 (US$519,000), it’s still nearly 30 per cent higher than three years ago. Prices may have to fall further, or mortgage rates may have to drop, to get home affordability “back in check,” McLaughlin said.
There’s also not much to buy. The number of newly-listed properties fell 8 per cent in February compared with the month before, and the inventory of available homes dipped to 4.1 months, according to the Canadian Real Estate Association.