Time for your weekly roundup on the biggest stories in real estate.
Vancouver real estate showed another month of mixed indicators. Inventory rose by a massive 7%, while sales showed double digit declines. More inventory and less sales typically means less pressure on prices, but not last month. The composite benchmark price rose 2.1% from the month before, making the price of your typical home $89,000 more expensive.
The end of 2016 showed an interesting thing in Toronto real estate, mortgage delinquencies hit a record low. Only 0.12% of mortgages in the city were delinquent. Awesome for banks, but not so great for the market. The rate of mortgage delinquencies dropping in Toronto was 5x faster than the national number. This likely means the market is overly liquid, which primes it for overreaction to almost any hiccup.
Toronto buyers appear to be spooked after policy changes in Ontario. Composite benchmark prices fell up to $2,100 per day in July, a pretty big change considering the climbs it was making just a few months before. While the drop is steep, the price of a typical home is still 18% higher than last year – so the market isn’t exactly crashing… right now at least.
China’s international real estate buying spree stalled for the sixth month in a row. China’s foreign exchange reserves made the largest increase in over 3 years, indicating less money is leaving the country than entering. This shows that new capital controls implemented in January are severely throttling capital from leaving the country. When taking money out of the country becomes harder, it’s harder to make big ticket buys like real estate. Don’t expect this to change soon, the People’s Bank of China just announced they’ve trained over 400,000 people to prevent “money laundering” (a.k.a. circumventing capital controls).
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