Categorized | International

Canada’s Housing Market May Be Weakening

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Officials in Canada are starting to grow worried that the nation’s housing market is starting to weaken. The Financial Minister of Canada reported earlier this week that all signs are pointing to a softening housing market for 2012.

Both Vancouver and Toronto are at the center of the weakening market, as each city has faced problems in recent years with the overbuilding of condominiums and residential real estate properties. Neither city has been able to match the overabundance of supply with adequate demand.

In an effort to combat the deflated demand in the housing market, banks are heavily promoting low interest mortgage loans to anybody who qualifies. However, they have not had a great deal of success.

Canadian government officials have made it clear that they do not plan to intervene in the residential real estate market at this point. Economists have warned them, though, that they must shed light on the situation so as to avoid a crisis similar to that experienced in Europe and the United States.

Current debt levels are fairly high among Canadians, as low interest rates have kept costs down. However, there are clear warning signs that indicate that those interest rates may rise in the near future. Such a situation would cause a serious economic crisis in Canada.

Officials from Canada are watching the current European debt crisis closely in order to determine what kind of effects it will have on Canada’s economy. Perspectives regarding how the situation will affect Canada have been mixed, as some believe that there will be little to no effect, while other economists believe that the impact could be significant if Europe continues to falter.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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