Friday, February 25, 2011

Housing Affordability In Canada Improved

Housing Affordability In Canada Improved
Housing affordability improved at the end of 2010 throughout Canada, a study released Thursday says, mainly due to slightly lower interest rates and slowing price gains. The RBC Housing Affordability Index has now eased for two consecutive quarters as bond yields remain relatively low, while the economy shows signs of improvement. The country has also been steadily adding jobs, bringing employment levels back to where they were before the 2008 recession. Still, the respite is likely to be short-lived. RBC economist Robert Hogue estimates housing affordability will begin to erode over the next two years, as the Bank of Canada is seen resuming its rate hike campaign this spring. However, once interest rates stabilize in about three years, housing costs are expected to advance only gradually.

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