Time for your weekly cheat sheet on this week’s most important stories.
Canadian Real Estate
Swiss mega-bank UBS updated their Bubble Index, with Toronto and Vancouver making the list. Actually, they didn’t just make the list – they were in the top 5. Toronto ranked third, and Vancouver was right behind in fourth. The bank further added that rising rates and decreased affordability limit further upside in the medium and long-run.
Reverse mortgages, where seniors draw down their equity, hit a debt record in July. Filings show reverse mortgage debt reached $2.99 billion in July, up $29.74 million from the month before. This represents a 45.32% increase compared to the same time last year, which is huuuge growth. The annual growth trend is going strong, and makes this a new segment for real estate debt to watch closely.
Toronto and Vancouver real estate markets are two Canada’s fastest cooling markets. Vancouver’s SNLR fell to 52.8%, down 18.01% from the same month last year. Toronto’s ratio fell to 48.8%, down 17.71% from last year. Once the SNLR is under 40%, prices generally start declining very quickly. Currently, no Canadian real estate market is in that territory.
Canadian real estate prices are heating up again, but not by much. The aggregate benchmark of large Canadian cities hit $625,400 in August, up 2.54% from last year. The 2.54% annual gain is slight improvement from the month before, but far from the 10.55% we saw last year. Has anyone else considered those cities may have borrowed future growth?
Toronto Real Estate
Toronto’s new condo sales are at an all-time high for prices, but sales are dropping while inventory rises. Altus Group reported 803 new Greater Toronto condo apartment sales in August, down 1.1% from the month before. The City of Toronto represented 521 of those sales, down a whopping 14.59% from last year. Meanwhile inventory reached 8,842 new units for sale, up 33.8% from the year before.
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