Time for your cheat sheet on this week’s most important stories.
Canadian Real Estate
Toronto And Vancouver New Home Prices Fall, While Montreal Soars
Canadian new home prices are stagnating, according to the New housing price index (NHPI). The national NHPI was flat in January, and is up just 0.19% from one year before. Toronto and Vancouver both saw declines in their respective NHPIs, but still outperformed the national index over the past 5 years. Montreal is outperforming the national index by every possible measure. Prices in the city are now growing even faster than Vancouver, over the past 5 years.
Canada Is Making It Easier For People To Take Out Larger Mortgages
Canada is making the newly introduced stress test a little more flexible, and it’s going to mean bigger mortgages. The 5-year benchmark rate used to “stress test” insured mortgages is being replaced. The new benchmark used for the test will be the weekly 5-year median of applications, plus 2 percentage points. As of Feb 18, the government estimates this would drop the stress test rate by about 30 bps. A lot of lingo there, but what does it mean? That translates to about 3% more buying power for insured home buyers.
Canadian Real Estate Enters A National Seller’s Market, As Sales Jump
One of the industry’s indicators is now showing a national “seller’s market.” The sales to new listings ratio (SNLR) for Canada’s aggregate of major cities reached 60.5% in January, up 6% from last year. During a seller’s market, prices are generally expected to rise. This is opposed to a buyer’s market, where prices are expected to fall. No major real estate market is in a buyer’s market at this time, according to this measure.
Canadian Real Estate Prices Are Climbing At The Fastest Pace In Almost 2 Years
Canadian real estate prices are rising at the fastest pace in almost 2 years. CREA’s unadjusted benchmark price of a home across Canada reached $640,200 in January, up 4.74% from last year. Price growth has accelerated for an 8th consecutive month. They are currently the fastest rate of growth since February 2018. Most of this growth is being led by Eastern Canadian markets, like Ottawa and Montreal.
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