A new Reuters survey has revealed that the dramatic dips in oil prices are leading Canada to a correction after a long housing boom period.
Almost 75% of the polled forecasters believe the movements in oil values can ignite a housing correction in the country, as the chances of a plunge in home prices have risen when compared with three months ago.
However, Reuters’ study also said that the majority of the analysts view the house price falls to just be within Western Canada’s provinces, which rely mostly on oil extraction, production and export.
It added that the growth in home prices will likely slow down this year until 2016. Homebuilding is also set to be cool from elevated levels
After nearly doubling over the past decade, average home prices in Canada are expected to rise more slowly this year and next, while homebuilding could also cool from elevated levels.
Reuters predicts a rise of 1.8% for 2015’s house prices and 1% for 2016. Both are sharp drops from the 5.2% and 2% growth predicted in November.
Housing starts are also set to drop to 180,900 units at a seasonally adjusted annual rate by the end of the year from 185,000.
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