Genworth: Higher house prices into 2011?
By ebizniz on June 23, 2007 - 5:13pm
A web-log posting by Vancouver Mortgage.
This week, Genworth predicts higher Canadian house prices into 2011 and ‘relief’ for buyers with longer amortization term and lower-down payment requirement.
The report quoted:
“In Vancouver, new home price increases are forecast to be 7 per cent in 2007 to an average of $673,706, compared to a 6.9 per cent average hike last year. Vancouver new home prices are then forecast to climb 4.3 per cent annually on average from 2008-2011. Growth in Vancouver resale home prices is forecast at 11.7 per cent this year to $569,689, down from a 20 per cent resale home price rocket in 2006, and increases of more than 13.5 per cent in 2005 and 2004. Vancouver’s resale home prices are expected to rise a more modest 6.6 per cent annually through 2011″.
I think the price increase predictions could be too simplistic for the following reasons:
1) The impact of higher mortgage interest rates on housing market sentiment was not mentioned, and this could trigger a price correction. With possible 0.5% to 1.0% interest rate increase this year and early next year, I suspect housing demand will drop, and the market may take a dive.
