This Week’s Top Stories: Canadians Are Extracting Billions In Home Equity, While The 1% Sees Their Income Grow 6x Faster Than The 99%

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

Canadian Real Estate

Canada’s Richest Households Are Seeing Income Grow 6x Faster Than The Bottom 99%
The gap between Canada’s wealthiest households, and the rest of the country is getting wider – and fast. To be in Canada’s one-percent, you need to earn at least $236,000 per taxfiler as of 2017, up 4.33% from a year before. To be in the 0.01%, the top 10% of the one-percent, income needed to exceed $740,300 per taxfiler, up 9.56% from the year before. The top 0.01%, a.k.a. the one-percent of the one-percent, annual income needed to exceed $2.7 million in 2017, up 22.06% from the year before. To contrast, the median income for the bottom 99% hit $34,700 in 2017, up 3.89% from the year before.
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Bank Of Canada: Canadian Homeowners Have Extracted Hundreds Of Billions In Equity
Canadians are extracting home equity at a breakneck speed, and HELOCs are just a fraction of it. In 2018, the Bank of Canada estimates $46 billion worth of HELOC credit was drawn, down $2.7 billion from a year before. Another $37.1 billion was extracted through refinancing, down $3.2 billion from a year before. That’s about $83.1 billion in just a single year. Over the past six years, the BoC estimates over $477.5 billion in home equity has been drawn. A significant amount of the country’s GDP is linked directly to extracting the rising value of homes. This compounds the issues of falling real estate prices.
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Toronto And Vancouver Real Estate Is Flooded With Amateur Landlords
There’s a huge number of multiple-property owners in Canada. In Ontario, there were 835,175 multiple-property owners in 2018. Toronto represents 359,475 of those owners, about 43% of the total. British Columbia has 268,600 in 2018. Vancouver represents 143,910 of the owners, or 53.6% of the total. The majority of multiple-property owners in Canada own one unit, other than their home. This indicates they are most likely small landlords, especially in the city.
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Vancouver Real Estate Is Once Again The Fastest Cooling Market In Canada
Quebec is seeing demand soar, while B.C. inventory is piling up faster than it’s selling. Gatineau’s real estate market saw the sales to new listings (SNLR) rise to 66.7% in August, up 11% from last year – the fastest in the country. On the opposite end of the list is Vancouver, which saw its SNLR fall to 40.5%, down 12.3% from last year. Quebec real estate markets have been trailing in price growth for the past few years. Meanwhile British Columbia had been leading, so the switch isn’t all that surprising.
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Toronto Real Estate

Slow August Sees Toronto New Home Sales Fall, While The 905 Picks Up
Greater Toronto new home sales are up from last year, but the market is still slower than usual. There were 1,400 new homes sold in August, up 18.84% from the same month last year. Year-to-date (YTD) that adds up to 21,349 at the end of August, up a massive 39.65% from last year. However, YTD sales are still down 23.49% compared to the 5-year median sales volume, over the same period. Considering last year was very slow, the annual increase isn’t all that big of news.
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Vancouver Real Estate

Greater Vancouver New Home Absorptions Rise, After Cutting Releases In Half
Greater Vancouver is seeing new home absorption rise, after throttling inventory due to soft demand. There were 254 pre-sale units released in August, down 75.6% from the same month last year. The drop was even 57.9% fewer than MLA had forecasted for the month. This helped to bring new unit absorption up to 40% for the month. The remaining anticipated units are expected to be delayed until demand improves.
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