Time for your cheat sheet on this week’s most important real estate stories.
Canadian Real Estate
The industry is now forecasting this year isn’t going to be another boom year for Canadian real estate. The Canadian Real Estate Association (CREA), the agency that represents real estate boards across the country, has adjusted its forecast for 2018. The average sale price at the end of 2018 is expected to be $498,100, a 2.3% decline from the year before. Sales are also expected to fall to 479,400 across Canada, a 7.1% decline compared to 2017. The agency is also forecasting price growth below inflation in 2019.
Canada’s banking system is one of the biggest concerns for the Bank of International Settlements (BIS). The BIS, known as a central bank for central banks, has published a quarterly review of domestic banks. The review notes Canada is the only country with alerts for all four warning indicators. This means Canada is now likely to experience a financial crisis, in the not so distant future.
The Canadian Real Estate Association (CREA) numbers for 2017 weren’t so hot. Canada saw 516,257 sales, a 4.53% decline from the year before. This is the first sales decline since 2012, and the largest annual decline since 2008. Price growth is also tapering rapidly, from the all time highs observed in the second quarter of 2017.
Toronto Real Estate
Toronto detached real estate prices are declining, as the demand curve sees a major shift. The Toronto Real Estate Board (TREB) is reporting a benchmark detached price of $915,300, a 2.06% decline from last year. Greater Toronto saw detached sales drop to 2,169, a 41.71% decline. Active detached listings rose to 7,852, a 199.24% increase compared to last year. Less sales, more inventory, and lower prices? At least the market is starting to make rational movements.
The Teranet–National Bank of Canada (NBC) HPI is seeing Toronto real estate prices decline. February saw a 0.15% decline, bringing annual gains down to 6.19%. Toronto real estate is now under performing the national average by more than a full point.
Vancouver Real Estate
Prices in Vancouver continued to rise… or did they? Teranet-National Bank of Canada’s HPI shows Vancouver saw prices rise 0.42% in February. This brings the 12 month gain for Vancouver up to 15.79%. If you’re an agent, that price gain probably seems a little strange. The reason is home prices actually declined by 1.3%, when not smoothed. Click through to find out how smoothing may be giving a delayed read on price declines.
New York Real Estate
New York City has always been the target of speculators, but after last year’s price increases, the city is serious about preventing a bubble. The State Assembly quietly added a new measure to the budget, giving the City the power to tax speculators. The new speculator tax is the latest measure designed to curb demand from buyers that don’t actually plan on living in the units they’re buying. How much did prices have to rise before the city decided to crack down? Only about 5%.
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Photo: VV Nincic.