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IMPORTANT: As of July 1st, 2011, functions once performed by the Wisconsin Department of Commerce have been moved to other state agencies and the Wisconsin Economic Development Corporation. The former Commerce web site will continue to exist for the next several months as resources are moved to new web site locations. We will make every attempt possible to direct our users to the new locations as web resources are moved.

Division of Investment and Export
PO Box 7970
Madison, WI 53707-7970
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Vol. 7 #6, July 2008

Differences between Canadian and U.S. Housing Markets
Canada’s Toronto-Dominion (TD) Bank reported at the end of June that the long awaited end of the Canadian housing boom has finally occurred, reflecting more moderate demand and increased supply of properties for sale.  While nothing like the slump that has hit the U.S. market because of the sub-prime mortgage crisis, most of Canada’s major housing markets have moved out of seller’s territory to more balanced markets. 

The growth in average home prices in Canada is expected to slow sharply from the 11 percent posted in 2007 to a low single digit pace.  TD economists forecast a modest national average price growth rate of 2 percent this year and 3.5 percent next year.  Sales are significantly lower than in the banner year that was 2007, but they are returning to 2004-06 levels, held up by solid economic and financial fundamentals.  Saskatchewan and Manitoba are bucking the national trend this year with double-digit growth, but are expected to cool next year.  Non-residential construction is still strong in Canada and the federal government has been proposing a number of infrastructure projects.

Adjustable-rate mortgages (ARMs) were never as popular in Canada as in the United States. New Canadian home owners are not experiencing the spike in mortgage payments leading to increased delinquencies and foreclosures that precipitated the housing market decline in this country.  Canadian consumers are not as leveraged through their home equity as are U.S. consumers.  The full report from TD is available at http://www.td.com/economics/special/pg0608_housing.pdf.  To learn about other ways that the Canadian market is different from the domestic U.S. market, contact the Wisconsin Department of Commerce’s Canadian Specialist, Mr. Stanley Pfrang, stanley.pfrang@wisconsin.gov, (608) 267-0639.