Canada housing market

2022 - 6 - 21

Suburban real estate vulnerable if demand shifts post-pandemic ... (CBC.ca)

The gap between downtown real estate and houses in the suburbs narrowed significantly during the COVID-19 pandemic, a development that may make markets ...

"Where families once left city centres in the pursuit of more space once kids came along, they could now move much further afield, including to rural communities and provinces with better affordability" In 2016, a house in the suburbs 50 kilometres outside of downtown would typically be worth about 33 per cent less than a similar home in the city. "But this pattern may have shifted during the COVID‑19 pandemic," Louis Morel, a policy adviser at the central bank, said in an analytical note released Monday.

Douglas Todd: Canada's housing market has turned on its head ... (Vancouver Sun)

Analysis: A 'fear of missing out' has given way to 'a fear of getting screwed,' says one mortgage broker.

However, over 50 per cent of Canadians end up breaking their five-year mortgage before the term expires, often incurring huge fees to break their term early.” They are joined by a new stream of 140,000 international students and roughly 450,000 guest workers, who will place more pressure on urban rents, which are surging. Governments did nothing to stop the speculation. Many bought in a frenzy by borrowing against their own homes, when mortgages were rock bottom. The housing sector is gigantic in Canada — it consumes 37 per cent of investment capital, much higher than in more diversified economies. Even The Economist has zeroed in on Canada’s problem, saying, “A comparison between Canada and other rich countries should give rise to some concern. “That’s when Canada could really feel the downside of basing much of its economic growth on driving up household debt.” Many of those who overstretched to go all-in could soon be feeling burned. So now everyone is vulnerable to a bubble. And while there are housing difficulties in many countries now, don’t be lulled into thinking Canada is like elsewhere. Many buyers are waiting for a lower-cost purchase. The pandemic-induced exodus to spacious homes in the suburbs has collapsed.

“Significant Gap” Between Home Costs and Borrowing Capacity ... (Storeys)

Instead of sagging to 255,000 as economists anticipated, the bank says housing starts rose 21,500 to reach 287,300 (seasonally adjusted and annualized), their ...

Indeed, there is now a significant gap between the increase in property prices and the borrowing capacity of buyers,” reads the report. According to the report, the Teranet–National Bank Composite National House Price IndexTM increased by 1.6% in May compared to the previous month and after adjusting for seasonal effects. Since the beginning of the pandemic, the composite index has grown by 38.7%, while borrowing capacity has declined by 5.8%, representing a 44.5% gap. This could result in a slowing of the resale market further given that most new mortgages are variable rate. “As for the variable rate, it is still at a level that allows buyers to qualify at the 5.25% rate. However, this could change quickly in the coming months if the Bank of Canada normalizes monetary policy as planned.” Based on the active-listings-to-sales ratio, despite looser conditions, sellers markets continued to prevail in all provinces save British Columbia, Alberta, and Saskatchewan, where the market was balanced, according to the report. With the continued normalization of monetary policy, Bank of Canada estimates that property prices could decline by 5% to 10% by the end of 2023 to be more in line with the financial reality of households. The drop in home prices was quite widespread, leaving virtually no corner of the country untouched, after a pandemic-inspired red-hot run. There is, at least, some good news on the supply front. The bank also highlighted the softening of home sales and prices that came with the spring. In fact, 75% of the markets covered saw price retreats.

Canada housing market and interest rates – what's the impact? (Mortgage Professional America)

Rapidly rising interest rates are having a noticeable chilling effect on housing market activity across Canada, according to Robert Hogue of RBC Economics.

Rapidly rising interest rates – we expect the Bank of Canada to hike its policy rate by another 125 basis points by the fall – apply uneven pressure on home buyers across Canada with those in the most expensive markets facing the bigger challenges” Hogue said. “We expect bearish sentiment to build and spread further as the Bank of Canada forges ahead with a ‘forceful’ monetary policy normalization. “We believe the cooling trends that have emerged in the last three months will intensify in the coming months, leading to widespread price corrections – especially in Ontario and British Columbia.”

The Canadian housing market is a headache. 5 things you need to ... (Eminetra Canada)

Home sales are declining rapidly and housing projects have been cancelled. Many buyers are waiting for low price purchases. But, as mortgage broker Ron Butler ...

Eighteen percent of Canadians recently told Manulife that they couldn’t afford their home. But not all pressure disappears from the market. And it’s unclear if their negligence is related to the large number of Liberal Party Cabinet Ministers and MPs of Ottawa (and MLA in Victoria) among those investors. When mortgages were solid, many rented their own homes and bought them enthusiastically. Canada’s housing sector is huge, consuming 37% of its investment capital, much higher than a more diversified economy. Article content “Affordability is already a problem, and rising interest rates have only exacerbated this. Article content So now everyone is vulnerable to bubbles. And while there are housing issues in many countries right now, don’t assume that Canada is like any other country. Article content Article content

Posthaste: Why these economists think Canada's housing correction ... (Financial Post)

Evidence that Canada's housing market is cooling has been obvious for several months, but now some economists say signs are appearing that the reckoning will be ...

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Credit card insurance could save you thousands of dollars, but you must understand your coverage to maximize your benefits. Was this newsletter forwarded to you? Accordingly, we are revising down our forecast for house prices to a 20% fall,” wrote Brown. “When your modelling suddenly shows values dropping 5% a month in some markets, what else can you do?” The spread between variable rates and the policy rate jumped by 50 bp to 170.