According to economists, the key drivers of prices are looking increasingly weaker and are warning Canadians not to expect any sort of significant growth in house prices for the next few years. The Scotiabank report came a week after TD’s economic announced that it expects home prices to grow at 2% per year for the next decade.
According to Scotiabank’s Adrienne Warren, the fundamental factors that drive home prices such as income gains, interest rates and population growth are looking less positive in the coming years.
The report notes that the large baby boomer generation retiring over the next few years will slow labour force growth, thus restricting economic growth. High immigration only partially offsets the aging population and low fertility rates. Interest rates can only gow so low and will eventually gravitate upwards, affecting housing affordability across the country.
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