The results were part of a slide presentation Evan Siddall, chief executive officer at Canada Mortgage & Housing Corp., gave Monday to a private audience in New York. The “Stress tests - Financial impacts” slide included five scenarios, one of which was called “Oil Price Shock,” which also predicts the unemployment rate would peak at 12.5 percent. Spokesman Charles Sauriol said later in an e-mail the scenario assumes oil at $35 a barrel over five years. The “Base Case” scenario calls for housing prices to climb 9.1 percent and joblessness to peak at 6.6 percent.
Crude oil traded at $41.60 a barrel at 3:21 p.m. in New York, and is set to average below$50 for a fourth month, amid record supplies. Siddall wasn’t available for comment after his presentation. He’s due to speak Thursday in Montreal.
Global Deflation
CMHC’s “US-style Housing Correction” scenario produced a 30 percent fall in home prices and 12 percent peak unemployment. The biggest hit to housing occurred under the “Global Deflation” scenario, where prices plunged 44 percent. That would also be the worst case for the labor market, pushing unemployment up to 16 percent.
The price of an average home in the country rose 8.3 percent to C$452,552 ($339,000) in October from a year earlier, according to the Canadian Real Estate Association. In Vancouver, prices jumped 16 percent and in Toronto, the country’s largest city, they increased 7.4 percent.
Other slides showed Canada’s home price growth since the 2008 recession has outpaced that of the U.S., Australia, and the U.K. It also reiterated risks to housing include high debt-to- income and concentration of net worth in housing.
CREW
We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.
Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome!
No comments:
Post a Comment