Canada's real estate market remains a global stand-out, according to the latest analysis by Scotia Economics.
Second-quarter data from the research division of Canada's Scotiabank shows declining residential prices in North America, Europe and Australia. It found that while Canada's hot housing market also has begun to cool, 'it remains a notable outperformer', rising 5 per cent for the quarter.
How long can this last? Scotia Economics expects a levelling out of prices when third-quarter figures are released, but it seems reluctant to predict trends in the current market.
Adrienne Warren, a senior economist and real estate specialist at Scotia Economics, notes that historically low borrowing costs combined with sharply lower home prices in many markets have restored housing affordability.
'In more typical times, this would be a sufficient catalyst for a strong revival in housing demand. But these are not normal times. Consumer confidence has been dented by persistently high unemployment, intensifying European sovereign debt concerns, and signs that the global economic recovery is losing momentum.'
With renewed financial market volatility adding to the unease, 'many households are choosing to prioritise savings and debt repayment over major new purchases,' Warren says. 'We expect global housing demand to remain moribund until the global economic recovery gets back on a firmer footing and some financial market stability returns.'