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Canadian properties less vulnerable
Though many housing markets around the world look as though their bubbles may have already burst, Matt French finds economists tipping Canadian properties as one of the safer bets for property investors.
According to many commentators we are in the midst of a global credit crunch, but leading economists have said this month that Canadian properties are less susceptible to a large drop in house prices than anywhere else, except Austria. This encouraging news for Canadian property owners comes after a review of several world economies by the International Monetary Fund's World Economic Outlook.
"I'd be much more worried if I was from Barcelona than if I was from Toronto right now," Roberto Cardarelli, senior economist at the IMF has commented. "The dynamics of house prices in Canada are in line with what we would expect based on the fundamentals of the economy."
Canada and Austria were the only two of the 17 countries studied in which growth in house prices between 1997 and 2007 was in-line with income growth, interest rates and other economic factors across the same period, which means Canadian property prices are more sustainable than elsewhere.
Canadian property prices also are not expected to drop in 2008, Benjamin Tal, senior economist at CIBC World Markets has said, though he added that the double-digit price rises experienced by some Canadian properties during 2007 are not guaranteed in the coming year.
Recent data from Royal LePage Real Estate Services, showed that in the first quarter of 2008 property prices rose in every major Canadian market except Edmonton, so though Canadian properties may not see astronomical price increases through 2008, they may see reasonable growth.
Ireland, the Netherlands and the United Kingdom fared the worst in the IMF study, with house prices already starting to fall in Ireland, while other vulnerable countries identified by the study include France, Spain and Norway.
Experts have urged that Canadians learn lessons from the experiences of the neighbouring US property market and not allow their 'bubble' to burst.
The average price for a two-storey Canadian property is currently CDN$400,647. However, if you want to live or invest in one of the major centres expect to pay more. A renovated three-bedroom, semi-detached property (pictured above) in popular Leslieville, Toronto, is currently on the market for CDN$499,900 from Julie Kinnear.
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