Posted by: Scarlett Lu
When it comes to buying homes, Canadians are taking on too much debt. "Canada's housing market has rebounded more strongly than other parts of the economy with sales at times at record levels, although prices remain despressed." The low rates are attracting Canadians to take out mortgage debts to buy homes.
These low rates eventually increased which eventually led to the collapse of the U.S housing market , which led to the financial crisis. Policy makers have the ability to influence financial institutions that issue mortgages, they should tigten government gauranteed mortgages. The housing market can be regulated and re-evaluated.
Home prices across Australisa have rose in the three months to Septemer because investors upgraded into more expensive properties. Interest rates are expected to rise and some homeowners may not be able to afford it. And some people may not be able to buy a home anytime soon.
Despite signs that the economy is recovering, home prices will continue to decline if unemployment rates remain high. Home prices play a role in rebulding the economy. As prices of homes go up, homeowners debt also increases. Homeowners may not be able to pay off the debt if they do not have a job.