Academics theorize why developers won’t create more purpose-built rental housing. They cite everything from user behavior to policy restrictions. For some reason, they never think to just ask a real estate developer candidly. A few weeks ago I shared a popular Twitter thread on real estate rental development. Not a lot of people realize real […]
Canadian banks have begun to weigh in on new mortgage changes, and they aren’t optimistic. Earlier today, the Office of the Superintendent of Financial Institutions (OSFI) announced a revision to the uninsured mortgage stress test. The change will shrink supersized mortgage budgets, reducing the number of over-leveraged borrowers. Two of Canada’s largest banks say it’s […]
Canadian real estate markets may have got the first big cooling measure today. The Office of the Superintendent of Financial Institutions (OSFI) announced they are moving to tighten uninsured mortgage leverage. The organization that regulates Canada’s banks, eased the mortgage stress test last year. Now that it’s clear mortgages don’t need stimulus, they’re looking to […]
One of the country’s top economists is calling bullsh*t on the supply-price narrative. BMO chief economist Douglas Porter sent a client note disputing an inventory shortage. He thinks it’s important to “crush” two myths about Greater Toronto’s blowout home sales in March. Let’s dive into that take. Myth 1: Last March Sales Were Distorted By […]
One of Canada’s largest banks made an unusual move — they called out the role the Bank of Canada (BoC) played in the property bubble. Well, they subbed them. BMO senior economist Robert Kavcic sent clients a housing analysis this morning. He attributes the transition from a hot market to one that’s going to burn […]
One of Canada’s largest banks isn’t joining its peers in a call for housing cooling measures. Scotiabank Chief Economist Jean-François Perrault thinks the country should take a wait-and-see approach. The bank is warning a hasty decision could unfairly penalize existing homeowners. They suggest Canada wait it out, because rising inventory may solve the issue in […]
Greater Toronto real estate is now earning far more than most owners could make working. Toronto Regional Real Estate Board (TRREB) data shows home prices soared in March. A typical home saw prices rise by half the region’s median wage in just over a single month. That’s a typical home. A detached home jumped in […]
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 […]
