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Lofty northern housing prices soften a tiny bit

September 28, 2012

The mainstream media often states that the highest housing prices in Canada are in Vancouver, yet Ft.McMurray’s prices are actually higher. Both places have cooled off a little bit lately.

The average residential house price in Canada was $364K. Yet the larger cities in the north all exceed the Canadian average.


There has been slow and steady inflation in northern house prices over the past 10 years. This has eased so very slightly lately, perhaps because of a change in the CMHC lending rules to make the maximum length of mortgage 25 year instead of 30.

The easy money policies of central banking authorities, including the Fed’s commitment to zero interest rates effectively until 2015, suggest that interest rates will stay low and housing prices will continue to creep upwards. The growing household debt load is concern to the Bank of Canada. However, it is hard for the Bank to diverge from the lead of the super-loose money printing policies of the Fed. If the Bank of Canada were to indicate it was going to raise its bank rate, it would bring about a stampede of investors into the Loonie and raise its value. The Canadian government would find this awkward as the manufacturing sector, the Opposition and the press would decry a rising dollar.

The risks for homeowners in the north: