Many homeowners in Alberta are rushing to sell their properties as prices have started faltering and buyers are growing increasingly scarce.
The province appears to be showing early signs of correction, prompting the worry that the whole country may catch this housing market flu. The decline in Alberta’s housing market performance is credited to Canada’s weakened economy and the overvaluation of 30%.
Bank of Canada (BOC) governor Stephen Poloz has admitted he decided to cut the bank’s key lending rate last month due to stretched household finance.
The BOC’s economic modelling also indicated that the drops in crude values would hit households harder without lower rates.
Moreover, the Calgary Real Estate Board has recently admitted that low oil prices and economic woes have hurt consumer confidence in the region. The Board said home sales dropped by 35% in January to their lowest levels in almost a decade, while new listings soared 40%.
Canada’s house prices have been increasing steadily since the mid-1990s, increasing the wealth and borrowing power of homebuyers.
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