Top Stories

This Week’s Top Stories: IMF Numbers Show Canadian Real Estate Is Overpriced, and Variable Mortgage Rates Move To A 6-Year High

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

Canadian Real Estate

The IMF Crunched Numbers On Canadian Real Estate. Here’s How Overpriced It Is
IMF calculations show some Canadian real estate prices are detached from reality. Toronto real estate prices are 54.7% higher than fundamentals warrant. Vancouver is a little better, with prices just 51.3% above prices normally attainable. Both cities pale in comparison to Hamilton, where prices are 57.1% above attainable prices. Liquidity is another concept for another day.
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Canadian Variable Mortgage Rates Are Rising Very, Very Fast
Variable rate mortgages are going up in price, very quickly according to the Bank of Canada. New borrowers of variable rate, uninsured residential mortgages hit 3.74% in July, up 26.4% from last year. For insured mortgages, the typical variable rate hit 4.08%, up over 36.5% over the same period. The typical rate paid on a new variable rate mortgage is the highest it’s been in at least 6 years.
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Canadian Real Estate Sales Jump To 2016 Levels, But Industry Cautions Market
Politicians vowing to make buying a home easier, has sales jumping to new highs. CREA reported 41,819 sales in September, down 3.81% from the month before. September’s increase was the biggest 12-month increase since February 2016. Sales were also 7.45% higher than the 10-year median sales for the month, and the biggest since 2016. Sales are now higher than they were before cooling measures were implemented. Just in time for politicians to pour gas on that fire, am I right?
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Canadian Reverse Mortgage Debt Rises Over 26%, As Seniors Raid Their Equity
Cash strapped senior homeowners are tapping their home equity using reverse mortgages, at a very high clip. Filings show the balance of outstanding reverse mortgage debt hit $3.78 billion in July, up 26.2% from last year. This is a segment of credit that grew by over a quarter, in just one year. To contrast, most other credit segments are seeing growth just off of historic lows.
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