This Week’s Top Stories: Canada Considers Move To Increase Real Estate Debt, While Toronto and Vancouver Detached Prices Rollback Years Worth of Gains

Time for your weekly cheat sheet on this week’s most important stories.

Canadian Real Estate

Canadian Government Considers Move To Load Households With More Real Estate Debt
The Government of Canada is considering lengthening mortgage amortizations for first-time buyers. While the move will lower monthly payments, it increases the amount of debt they can carry by a lot. Lengthening mortgages from 25 years to 30 years decreases the monthly payment by ~12%. Unfortunately, it also means the amount of debt that can be carried increases by over 22%. Only the government would consider increasing access to debt an improvement in affordability. At least the banks will make more money… and we’re sure that wasn’t the plan.
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Canadian Real Estate Sales Make Longest Negative Streak Since 2009
Canadian real estate sales had an unusually slow January. CREA reported 23,968 sales in January, a 4.04% decline from the year before. The decline marks the longest stretch of negative annual growth since 2009. It was also the slowest January for sales since 2015. This year is off to a rough start.
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Teranet: Canadian Real Estate Prices Fail To Rise Over Past 5 Months, First-Time Since 2013
The Teranet-National Bank of Canada House Price Index failed to rise for a fifth consecutive month. The C11, an aggregate price index of Canada’s 11 largest cities, dropped 0.05% from the month before. Prices are now up 2.18% compared to the same month last year. Typically, a month over month change isn’t worth paying attention to, but this one is special. This is the first-time since 2013 that monthly prices have failed to rise for 5 consecutive months.
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Toronto Real Estate

Toronto Detached Real Estate Prices Roll Back Two Years Of Gains
Toronto detached real estate prices have rolled back over two years of price gains. The price of a typical detached across TREB was $903,800 in January, down 11.31% from peak. This is the lowest we’ve seen the benchmark since 2016, eliminating over two years of gains.
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Altus: Half Of Toronto Real Estate Buyers Were First-Time Buyers
The latest Altus survey shows nearly half of all real estate buyers are first-time buyers, but how? In order to fund their downpayments, 79% used savings and investments. 36% tapped their RRSPs. 49% used gifts and private loans. 12% tapped their inheritances. Another 7% used a line of credit. Despite what people say, first-time buyers aren’t locked out of this market. Representing nearly half of all sales, they’re actually a driving force of the unaffordability the government claims is keeping them out of the market.
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Vancouver Real Estate

Greater Vancouver Detached Real Estate Prices Fall To 33 Month Low
Greater Vancouver detached real estate prices are falling, as sales drop and inventory climbs. REBGV reports the “typical” home cost $1,543,400 in January, down 9.1% from last year. The month also saw the fewest January sales since 2009, and the highest inventory since 2014. Detached prices haven’t been this low in nearly 3 years.
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