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Canada's Housing Market Essay

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Canada’s Housing Market is Hot Again: Expect it to stay that way, economists say Table of Contents
Question 1 3
Question 2 3
Question 3 4
Question 4 4
Question 5 5

Question 1
Explain how changing interest rates (both low and high) impact the housing market. Use examples in your response.
The housing market is based upon the financial theory of mortgage which indicates the interest rate for the particular house unit. However, the interest rate is an essential component in the housing market which indicates the amount of money needed to be invested by the individuals to get the accommodation facility. In case of increasing interest rates, the housing market faces a loss. For example, if a homeowner demands a high mortgage people can change …show more content…

Along with that it also affects the whole economic sector of Canada. House Owners have to pay a certain amount of their profit to the government each year which increases the financial status of the government to some extent. According to different scientific research, Canada achieves a great amount from the housing sector which reached about 107 percent in the last few years (CBC, 2023). In the las In 2010, the GDP contributed by the housing sector was about 95 percent (CBC, 2023). It indicates that there is a huge impact of the particular industry on the country's …show more content…

When the interest rates rise, it increases the cost of the housing market and reduces their demands (Financial Post, 2023). This eventually drops the rates of the houses and increases the mortgage rates. In case of higher selling prices, the homeowners will find it difficult to sell their houses as the audience shifts to other places offering affordable housing. For example, the number of immigrants is increasing in Canada, increasing the rental market. As home prices fell last year in Canada, people started investing in the housing market and eventually, sending the prices of interest and sales higher. Another example could be the Strong Labour Market which means people are earning more and buying more homes as an investment in the

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References Apgar, W. C., & Duda, M. (2005). The twenty-first-century mortgage market: A balance of risk and responsibility. Housing Policy Debate, 16(3), 399-436. Avery, R. B., Brevoort, K. P., & Canner, G. B. (2012).

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