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This Week’s Top Stories: Toronto Is Home To 896,000 Mortgages, and How The Uber Rich Can Destroy Neighborhoods For Fun and Profit

This Week’s Top Stories - Toronto Is Home To 896,000 Mortgages, and How The Uber Rich Can Destroy Neighborhoods For Fun and Profit

Time for your weekly cheat sheet on the most important stories in real estate.

Canada

The Gap Between Canadian Real Estate Prices And Homeowner Expectations Is Shrinking
Canadian homeowners are tempering their expectations on home values. In Toronto, homeowners are overestimating the typical home’s value by 15.63% in 2016, down from 16.23% in 2011. In Vancouver they’re overestimating the value by 11.96%, down from 13.5% in 2011. Tapering expectations may be a sign that Canadians are ready to come back down to reality when it comes to real estate.

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Urban Land Banking 101: A Supervillain’s Guide To Ruining Local Real Estate Markets
High debt levels aside, low interest rates cause another issue that isn’t often discussed – urban land banking. This relatively rare phenomenon occurs when countries attempt to penalize savers, by setting interest rates so low they’re forced to invest. When bonds and the stock market become saturated, people with large wads of cash need an inflation anchor. Real estate becomes one of those anchors, despite the wide spreading social consequences that come with using land this way. Here’s how it works, and when you would use this alternative investment strategy.

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Toronto

Toronto Real Estate Prices Increased 8% For Each Percent Increase Of Population
Density increases the cost of housing, that’s a known. How much and why is a little more subjective. We crunch the numbers for Toronto, and determine that prices increased 8% for every percent of population that increased. Next question we need to answer is how much of a rise is justified, vs how much is exuberance.

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Toronto Is Now Home To Over 896,000 Mortgages
New data from Statistics Canada shows Toronto households held around 896,615 mortgages in May 2016. The number only showed relatively mild growth of 1.62% from 2011, but there is one thing worth noting – the rate of homeownership is declining in Toronto, for the first time in decades. This means more people entering the market, are less capable of carrying the full cost of a home.

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Toronto Real Estate Prices Are Down Over 9% From Peak
Toronto real estate is far from affordable, but prices are falling. The Toronto Real Estate Board gave its monthly update on prices, and the typical home is now $747,800. That number is 9.72% higher from last year, which would be the lowest gain since July 2015. Additionally, that price is also down 9.29% from the peak obtained in May 2017.

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