4 Factors To Look Out For To Get A Sense Of What To Expect In Canadian Real Estate In 2016

2016 has so far seems to be unkind.

Oil prices are low; the Loonie is at its lowest; borrowing costs are basically do not exisit anymore and the fact that rich foreign investors are buying up all the properties , is not helping either as it has been termed to be a ”double edged sword”.

#1. Oil Prices

The cost of a barrel of oil has swan dived to 60%; it is the lowest it has been in almost two years. Countries like Saudi Arabia have caused the price of crude oil to drop by putting surplus crude on the market. This has affected Canada as the energy sector is very important on home soil. So many people from the mining sector have lost their livelihood because of the low prices and as a result, oil production has been paused. There is a ying yang balance between the energy sector and that of the real estate; when one is off balance, so is the other. Everything has the symptoms of an unbalanced dosha. This is true for Western Canada. British Columbia is experiencing rising house prices while in Alberta, the opposite.

#2. The Low Loonie

The Canadian dollar is 70 cents less than the American dollar! This is a rate that has not been seen since the dinosaur age–of 2003. Due to this unfortunate happening, a recession might be pending. It is believed that the Western region of Canada will be most hard hit.

Right now, it is just a waiting game; waiting for the other shoe to drop..or shoes.

#3. Borrowing Costs

Mortgage rates can’t get much lower! The phenomenally low Loonie and price of oil has made Canadians to be a lot more frugal to he point where, it is affecting the housing market. Even though prices are lower. There is a high probability that the interest rates are going to be lower to minimize the crude’s reach into the economy.

#4. Foreign Investment

Every time a foreign investment in real estate is made, Canadians are affected because the prices go up. Not even Canadians can afford to buy there own home so for those renting, even that will go up. Tragic. A lot of long time residents of Vancouver are emigrating to other parts of the country for more affordable housing prices.

Due to the low dollar, foreign investors are just going to keep investing until one day, the bubble bursts. Then they’ll just move on to some place else. How parasitic of them.

Looking at the aforementioned factors, the situation is not yet dire; it could go either way. Let’s hope that irreparable damage has not been done.

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