On Thursday, June 23, 2016, 52% of Britons voted ‘yes’ to a referendum proposing that Britain withdraw from the European Union, an economic and political partnership of 28 European countries. Brexit, or Britain’s Exit from the EU, triggered uncertainty about future economic relations with the UK and EU, and sent shockwaves throughout the world.
Shortly after the results were revealed, David Cameron announced his intention to resign as Prime Minister, the British Pound dropped to its lowest level in 31 years, and UK stocks fell drastically as well.
Noting the importance of the UK to the global economy, the IMF has cut its forecasts for global growth and financial experts worldwide are predicting what effect the EU referendum will have on their own regional economies.
But how will Brexit affect the real estate markets in Canada and America?
A new year means a new set of predictions for the future of real estate. How will 2016 shake out? Here are some U.S. and Canadian prognoses:
U.S. housing is intimately tied with job outlook
With a strong 2015 behind us, growth in the housing market should continue in 2016 — as long as job opportunities continue to grow to allow both first-time homebuyers and existing homeowners to participate in the market. That’s even with possible economic changes like rising interest rates.
“As the economy gets better, job and wage growth should keep pace. So even though mortgage rates will rise, they will still be low by historical standards and very affordable,” says National Association of Home Builders (NAHB) Chief Economist David Crowe in a news release. The organization’s Senior Economist Robert Denk noted that with the evolution past the immediate troubles of the bust, the nation will see “broad-based recovery.” Continue reading