Time for your weekly cheat sheet on this week’s most important stories.
Canadian Real Estate
CMHC: 55% Of Toronto And Vancouver Real Estate Buyers Were In A Bidding War
The CMHC took a novel approach to finding out why Toronto and Vancouver buyers were so frenzied – they asked them. Conducting a survey of recent buyers, the agency uncovered what goes on deep in the mind of a real estate buyer in the middle of mania.
Some of our favorite insights were on overbidding, and going over budget. 55% of recent buyers in Toronto and Vancouver report they engaged in a bidding war. To contrast, only 17% did so in Montreal. In Toronto and Vancouver, a whopping 48% of buyers spent more than they budgeted. Compare that to just 23.67% of Montreal’s buyers. For more insights, click through and read the most important insights.
Credit rating behemoth Equifax expect credit defaults to rise by year end. The 90 day delinquencies have dropped to 1.08%, the lowest levels since 2009. That sounds like good news to the untrained ear, but is actually the opposite. When stats bottom, they’re more likely to reverse than continue lower.
The agency is also seeing the number of people that pay off the full balance of their credit card decline. In June 2017, 59% of people were paying off their credit card balance in full. As of the end of March 2018, that number has dropped down to 56%, a 5.08% decline. As people stop paying off the full balance, the agency warns that households become more likely to miss 2 or more payments in the future. A director from the agency added “we suspect delinquency rates to move modestly higher by year-end.”
Toronto Is (Still) The Fastest Cooling Real Estate Market In Canada
Using CREA’s sales to new listings ratio (SNLR), we find Eastern Canada is starting to warm up, and Toronto is cooling. Halifax and Ottawa saw their SNLRs rise 13.57% and 12.77% in May respectively, the fastest increase in the country. Toronto and Niagara was on the other side of that stat, with their ratios dropping 30.52% and 28.57% respectively.
Canadian Real Estate Association Lowers Sales Forecast, Declines Rise Over 50%
The Canadian Real Estate Association (CREA) is lowering their sales forecast. They now expect 459,900 sales in 2018, an 11% decline compared to last year. In March, they had been expecting 479,400 sales, a decline of just 7.1% from last year.
We pointed out in March, the market was on track for a decline closer to 12%, so it’s nice to see them catch up. Unfortunately, right now, the market is on track for a 15.4% sales decline compared to last year. Unless there’s a reason to think the back half of 2018 will see a sales boom, they’re still underestimating.
Toronto Real Estate
StatsCan: Nearly 1 In 10 New Homes In Toronto Scooped By Non-Residents In 2016-2017
Statistics Canada, the country’s national stats agency, has finalized its 2016 – 2017 non-resident ownership numbers. In Greater Toronto, non-residents own 2.63% of all housing stock in the area. Isolating the construction built in 2016-2017, we see that number jump up to 5.17%. Yes, non-residents are the proud owners of nearly 1 in 20 new condo developments, a significantly higher ratio than the general distribution of homes.
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