| By :
Molly Wider
It's a little puzzling that Canada has survived as well as it has during, what has been recently referred to as the Great Recession. Less than 24 months after it swooped through the U.S., Canada's housing market has bounced backed with amazing force. The Teranet - National Bank measures price changes for repeat sales of single-family homes. According to them, Canada's home resale price index is up for the seventh straight month in a row in all major metropolitan markets. Vancouver leads, rising 1.9% and is the only market to exceed the national average. Both Toronto and Calgary recorded gains of 0.6%, while Halifax and Ottawa posted 0.4% increase. Montreal had the smallest rise, up only 0.1%. The year-over-year national increase was 2.6%. This has many economists wondering how Canada seems to have escaped the home price correction that virtually every other Western country saw. The average price of a home is up 21% after a brief setback in 2008. On average, a single family home in Canada now costs approximately $341,000. The mystery lies in the numbers when we compare them to the US whose housing market plunged roughly30% (from their peak) and even Europe where the housing market numbers fell an average of 6%. Many economists feel it simply defies logic. It's not as though Canada was immune to the recession. Canadian stocks fell, unemployment rates increased by 8.5% with the loss of more 321,000 jobs. Our economy most certainly contracted and personal incomes fell. So the question is, what didn't happen? Did we simply recover quicker? There have been two suggested explanations. The first of them is that Canada's real estate market is sitting in a bubble that will eventually burst. Some economists feel this will happen about two years after the rest of the world, which in essence, could be any day now. The second explanation has more to do with sound lending practices by Canadian financial institutions and the right amount of stimulus being injected into the economy by the Harper government. For the sake of this conversation, we'll leave Stephen out of this one. Many economists are leaning our success towards sound lending practices. Good money practices are essential no matter who we are or where our economy stands. But for many, those sound lending practices leave them out in the cold. For example, those with bad credit are now even less likely to obtain loans at standard financial institutions. For these individuals, there are alternatives such as secured loans with private lenders. Strict lending practices are great for the economy, but for the little guy who is in a financial bind, let's be glad there are alternatives.
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