Fitch Ratings Expect Home Prices To Slowly Increase

Fitch Ratings mentioned that the increasing cost of homes, unlike the incomes per household and rents, will cause price appreciation in the market to eventually slow down.

Taking note of the effect the low-interest rate and investment made into the Canadian real estate market by foreign nationals, the rating company said that a 30 per cent rise in Vancouver and Toronto’s house prices in the previous three years cannot be maintained.

The recent easing of the prices in Vancouver was also pointed out by the firm, and they also said that federal and local policy changes to have the markets eased will cause the price appreciation to dawdle by 3 per cent this year, from last year’s 12 per cent.

The rating firm anticipates the strict regulation on mortgage lending by CMHC in 2016 to temper the increase in the demand for mortgages which was enhanced by low rates. The home price appreciation in the US is expected by Fitch agency to ease down this year from its previous five per cent in 2016 to 4 per cent.