Time for your weekly cheat sheet on the most important stories of the week.
Canadian Real Estate
Rising interest rates and huge mortgages are eating up household income across Canada. Canadians had a debt service ratio (DSR) of 6.51% in Q2 2018, up 3.33% from the same quarter last year. The rise in the ratio means households are now devoting the largest amount of income since 1993.
Canadians hit a new record for HELOC debt, and it’s growing faster and larger. Households owed $289.68 billion at the end of July, up $2.87 billion from the month before. The annual growth rate is now 2.58%, actually increasing from the month before. It almost looked like they were going to deleverage before last month, but nope.
The Canadian Real Estate Association (CREA) sees lower sales coming. The organization’s economists now see 462,900 sales across Canada, down 9.8% from last year. In 2019, they expect sales to rise to 472,700, up 2.1% from the 2018 forecasted number. Both numbers are down significantly from last year though.
Canadian real estate sales are falling to the lowest levels we’ve seen in years. CREA reported 41,151 sales in August, down 3.78% compared to last year. The drop in sales impacted all but three markets with over 500 sales for the month. This was the slowest August for sales since 2013.
Toronto Real Estate
Toronto condo apartment prices hit a new all-time high last month. TREB reported the price of a typical condo reached $505,500 in July, up 9.94% from last year. The City of Toronto saw the price of a typical condo reach $533,600, up 11.6% compared to the same time last year. The gains in this segment are much higher than those in other segments, such as town and detached homes.
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