Paul Sidhu, head broker at online mortgage company, MortgagesCanada.ca, believes Canadians have been the beneficiaries of more conservative lending practices and tighter regulation. "Without the extreme predatory lending practices witnessed during the real estate boom and bust in the U.S., Canadian lending institutions have preserved much more reasonable lending standards and it has prevented most buyers from acquiring property that they clearly cannot afford. This has kept most buyers in their homes and allowed demand to remain stronger than the supply of homes for sale. Mortgage interest rates remain very low with a five year fixed rate around 3.39%, it is clearly still a good time to be a home buyer in major cities in Canada."
Some of the continued strength in the Canadian housing market can be attributed to the wealth effect created by the global commodity boom. Canadian stock markets are dominated by resource and commodity companies have dramatically outperformed their U.S. counterparts mitigating the damage to Canadians’ retirement accounts and keeping sentiment stronger.
As demand for oil and other Canadian resources has propelled Canadian stock markets and housing prices higher, it has also driven the Canadian dollar to unprecedented heights, above parity with the U.S. dollar.