TORONTO — Activity in Canada’s real estate market will slow “modestly” next year as interest rates begin to rise, according to a new report from RBC Economics.The report pegs the risk of an outright crash in real estate as low, saying RBC expects the economy to grow and that interest rates will likely rise gradually starting next year.However, the bank says there could be a “severe” downturn in the real estate market if employment plunges due to a deep recession or if interest rates surge dramatically.Meanwhile, RBC says the economic shock from lower oil prices hasn’t been big enough to derail Canada’s overall real estate sector.In fact, it says the Canadian housing market is poised to post one of its best years on record despite a drop in home resale activity in the oil-sensitive provinces of Alberta and Saskatchewan.RBC says rock-bottom interest rates have fuelled demand for housing elsewhere, particularly in Ontario and British Columbia.In July, the Bank of Canada cut its overnight lending rate — which affects variable-rate mortgages and other products — by 25 basis points to 0.5 per cent.CMHC says Toronto housing market at ‘high risk,’ as economists fear Tories ‘throwing fuel on fire’Are millennials better off renting? Why young Canadians may want to put off home ownershipRBC predicts the central bank will raise the rate by 75 basis points to 1.25 per cent in the second half of 2016.“It has long been our view that the eventual rise in interest rates from generational low levels will produce significant headwinds for Canada’s housing sector,” the report said.“Much of the market’s vibrancy in the past several years can be attributed to exceptionally low — and declining — interest rates.”RBC said it expects the cooling to be moderate and controlled — for instance, home resales declining by less than 10 per cent over several years and price growth slowing to a rate of 3.2 per cent in 2016.“In our opinion, the risk of a crash — resales plummeting by more than 25 per cent nationwide for instance — is low for three main reasons,” the report says. “First, we expect the Canadian economy to grow and create jobs and boost incomes. Severe housing downturns usually coincide with recessions.”The other two reasons cited are strong immigration and the gradual pace at which interest rates will rise.RBC says it doesn’t expect national home prices to fall outright, at least in the short term, although certain segments of certain markets — for example, condos in Montreal — could see a decrease.The risks of a nationwide collapse in prices — such as a drop of 25 per cent or more — are “quite remote,” according to the report.
John Higgs, the treasurer of the Trust, said he was “furious” at the cancellation.”It’s an absolutely nonsensical decision,” he said, adding that the committee had been planning the event for over a year and he had been forced to tell almost 100 choir members that it would no longer be going ahead with less than a month’s notice. A spokesman for the cathedral denied the allegations of sabotage and said: “The Cathedral regrets that sales of tickets for the commemoration of the Commonwealth contribution to World War I, Forward Together, have been disappointing. “Because of this, and despite generous sponsorship, the costs of running the event would not have been covered. With great reluctance the decision was therefore taken to cancel what would have been a memorable event.”We hope that the many other commemorative events being held at the Cathedral, within Peterborough, and around the diocese will offer the opportunity for everyone properly to recognise the sacrifices of all who fought in this tragic war.”A page on the cathedral’s website promises refunds for anyone who has bought tickets or sponsored the event. A row has broken out over an armistice service at Peterborough cathedral as a senior cleric has been accused of sabotaging a First World War Commonwealth ceremony.Trustees at the Peterborough Cathedral Trust accused former acting Dean Tim Alban Jones of deliberately failing to promote the October 6 event, which has now been cancelled, because – it’s claimed – he did not approve of its military flavour. Jimmy James, the secretary of the trust, said that Mr Alban Jones had pressured the organisers to change the emphasis from celebrating the Commonwealth’s contribution to victory in the First World War to commemorating the armistice. The cathedral said the event had been cancelled because of “disappointing” ticket sales and said the cost of running the event would not have been covered. Mr James admitted that as of Friday less than 100 tickets had been sold, of the 750 that would be needed to fill the cathedral, but blamed Mr Alban Jones, now vice dean of the cathedral, for failing to promote it properly. He said advertising for the event had been delayed by two months and that events had been scheduled for shortly before and after the evening, and promoted before the Trust’s event, which Mr James believed damaged ticket sales.Mr James believes that Mr Jones persuaded the rest of the clergy that “we shouldn’t be celebrating the victory, we should just be commemorating the participation in the war” adding “I think he’s got a problem with all of that, I think, in common with a lot of Church of England clergy.”Asked if he believed the event was deliberately sabotaged, he said: “I’d get pretty close to that, yes, very close indeed.”Prominent figures including the High Commissioners from Australia and Canada were slated to appear at the event, which was supposed to feature “military music from around the Commonwealth” and songs from the First World War. Trustees said it would have raised £15,000 for the cathedral, which has been beset by financial problems in recent years. A cashflow crisis in 2016 meant that the cathedral had to be bailed out with a loan from the church commissioners, after it was revealed that staff were in danger of not being paid. Mr Alban Jones, who is also chaplain to the bishop of Peterborough, was acting dean between October last year and January this year, when current Dean Chris Dalliston took over. Want the best of The Telegraph direct to your email and WhatsApp? Sign up to our free twice-daily Front Page newsletter and new audio briefings.