That is because lending practices here are much more sound than in the U.S. The likelihood of Canada having a meltdown like they had in the U.S. is extremely low; This is a combination of the lending practices prior to the peak in 2007 — they were more restrained, better underwriting practices in Canada. We also think there are a number of factors in the Canadian market which have lent themselves to more prudent lending.
The HST now factors heavily into home buying decisions in Ontario and is creating indecision.
Reviewing the most recent Toronto Real Estate Board statistics. Sales are moving along well and the inventory levels are continuing to rise at a pace that is typical for this time of year. For May 2010 there were 9,460 sales reported to TREB! Unlike recent record breaking months, this falls below the record breaking territory we hit in May 2007, but is similar to other May numbers we have experienced in previous years. Currently there are 25 K homes for sale up from 22 thousand 6 last month. Last year, there was actually a decrease in the available number of homes between April and May. This year there was an increase, which is seasonally typical. This is causing us to go into more of a “Normal or Balanced Market” and step away from some of the silliness we’ve been experiencing over the last year.
In select pockets and price ranges, inventory is still pretty scarce, but in the majority of neighbourhoods of Toronto there is more selection for the buyers out there. That means there’s a greater likelihood this year that there may be a correction or softening in housing prices rather than a continued increase. We expect the market to continue cooling through out the year and continue to cool into 2011. The TD Bank predicts prices will decrease by 2 - 3% by the end of 2011.