The Canada Mortgage Housing Corporation is raising the alarm bells yet again about a possible spring cool down in the Real Estate market. The CMHC has warned about forces that could slow down the market, including unemployment, which remains high. There are also concerns about Canadians taking advantage of low borrowing rates by over-stretching themselves.
However, most of the buyers in the market right now enjoy stable employment, as their jobs have enabled them to work remotely. The lay-offs and job losses disproportionately affected workers in the service sector. The service sector workers typically make up the bulk of the rental market, which explains why there has been a softening in the rental market-particularly in Toronto. This has armed Tenants with the power to re-negotiate rent with their Landlords. Tenants living downtown should enjoy this rare window of opportunity, as once things re-open downtown, the rental market will flourish. The Real Estate market does have the potential to soften once the downtown market picks up, taking pressure off of the suburbs. However, a leveling-off seems more likely than a decline in the market. As always, take anything the CMHC has to say with a grain of salt. Their dreary fall-forecast from last year predicting a 12% decline in the market never came to fruition.
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