Quantitative ease (QE) is a simple concept, but not well understood by most people. Increasingly folks tell me, “QE inflates home prices,” and “prevents prices from dropping.” The first part is true, but the evidence on the second part is a little shaky. It can help to push home prices higher during a tight market, […]
Time for your cheat sheet on this week’s biggest stories. Canadian Real Estate Canadian Real Estate Overvalued, Toronto Needs A 28% Correction For Fair Value: IMF Many Canadian real estate markets are massively overvalued, according to the IMF. Their model shows Toronto’s estimated value is 28.2% lower than current prices. Vancouver’s estimated fair value is […]
Canadian real estate prices are the most overvalued in the G7, measured against rents. IMF data shows Canada’s house price-to-rent ratio in Q2 2020 was the highest of any G7 country. The indicator is commonly used by analysts and economists to determine stretched valuations. Home prices across the G7 have grown faster than rents on […]
Canada’s banking regulator is seeing a spike in highly indebted mortgage borrowers. The Office of the Superintendent of Financial Institutions (OSFI) observed renewed growth in the exposure of mortgages to “over-leveraged” households in Q4 2020. Low interest rates are fueling rapid growth in borrowing — for both quantity and size. The share of mortgages going […]
Canadians have big expectations for home buying and price growth over the next year. Mortgage Pros Canada (Mortgage Pros) released its annual report, containing consumer survey results. The survey, taken at the end of 2020, shows record sentiment for home buying and price growth over the next year. William Dunning, the organization’s chief economist, says […]
Canada’s lack of housing affordability is coming for that record top spot. RBC senior economist Robert Hogue published his quarterly affordability assessment for Q4 2020. Home prices have increased almost enough to erase the drop in mortgage rates. The bank sees the current momentum pushing prices higher in the near term. If payments rise even […]
Canadian real estate prices are one of the biggest threats to the country, said a global agency. The IMF recently completed its regularly scheduled staff report on Canada. Staff found real estate prices present one of the biggest threats to the country. The agency shared the detailed numbers produced by their valuation models with us. […]
Canadian real estate markets are getting riskier, says the country’s national housing agency. The Canada Mortgage and Housing Corporate (CMHC) released its quarterly risk assessment for March. The agency now believes two-thirds of the country’s largest markets show elevated risks. Five of those markets are now showing a high degree of vulnerability. Canadian Real Estate […]
Greater Toronto new home sales cooled abruptly, as pent-up demand collapsed. BILD GTA and Altus Group data shows a sharp decline in new home sales for February. The drop hit the City the most, especially in the condo apartment segment. While the drop was sharp, total sales for the month were more in line with […]
We’ve all heard the Canadian real estate stories, especially in Greater Toronto. An agent lists a property below market value, and dozens of offers pour in. It eventually sells much higher than the asking price, and sometimes even higher than the comps. Just one issue. How much did everyone below the winning offer bid? Did […]
