OCTOBER 2009
Speculation and opinions in the housing market trend are all but the same baseless predictions. There are no guarantees that changes will occur in the next 2 to 5 years. The low interest rates drove the homebuyers crazy purchasing home property value's at sky's the limit. For example: a single-detached home with original price of $250,000.00 was for sale today at $560,000.00, homebuyers' must offer upto 15% on top of the asking price to close the deal. Homebuyers' foresee an increase in the bank's interest rate in the coming months will give them a financial security in the long term. Almost all Canadian Realtors indicate their programs and analysis have a very positive outlook upto year 2012.
FUNDAMENTAL ANALYSIS
China and Canada Vs US
Like China, the housing bubble is still a greater concern that it may soon fall to its lowest. In today's US Fed news, China is alarmed with the US Feds printing of US Dollars approx. 10 thrillion dollars per year to buy bonds. As a result, global dollar reserved is directly impacted, China have almost 2 thrillion US$ reserve on their current treasury. If the US Dollar devalues, China's only alternative is to buy Gold which eventually will increase its value. In Canada, some experts believe that an increase in the Canadian Dollar value against US$ will trigger the BOC to cut its interest rates further down to stabilize the economy against inflation and trade imbalances.
CHART REVELATION
The current Canadian home price chart is up by a small percentage from last month an indicative of economic recovery as one economist would say. But overall, this housing price was a result of a drop in price 3-4 months ago. Ultimately, the price is in the "correction" level of activitiy: if the price stops at the level considered as the "resistance" level, then the same scenario must occur, i.e. the price will fall on a downward position.
BEST STRATEGY
Wait and See.
