It looks like Canada’s home prices are falling slightly in 2013, according to the Teranet-National Bank Housing Price Index. Numbers show that prices went down by 0.3% in an 11-city index, as reported by the CBC on February 20, 2013.
Prices took a dip in seven of the 11 cities that the Teranet index tracked – only Victoria, Halifax, Quebec City and Ottawa did not report a dip in home prices.
Mark Carney is happy that home prices are falling
According to Canada’s central bank governor, Mark Carney, that is not an unwelcome situation; “Real wealth is built through innovation, and it’s gained through hard work. It’s not through some magical asset inflation.”
Carney went on to reveal that he expects that the Canadian housing market will continue to remain subdued for the next couple of years and that the steady drop is a necessary one that will shift Canada’s economy to one that is driven by exports, rather than consumer loans.
Canada’s home prices actually went up in January
Although the home price index was up by 2.7% from January 2012, the Canadian Real Estate Assocation (CREA) said that sales activity actually declined by over 5% in January compared to the same time last year. CREA believes that this is due to tighter lending rules implemented by the government.
Scotiabank’s economist Adrienne Warren believes that, although there will not be a major dip in sales, a further softening in both sales and pricing for 2013 is highly anticipated.
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