Time for your cheat sheet on this week’s most important real estate stories.
Canadian Real Estate
Canada is taking measures to slow non-resident speculators, but what happens when the speculators are calling from inside the house? China rolled out 3 serious moves to resolve speculation including increasing required down payments by the number of homes, banning flipping within a short period, and limiting amortization. Focusing on cooling demand, instead of making sure demand can be sustained is a unique take that global governments should be taking notice of.
Canada’s hottest real estate markets saw explosive growth in new listings in November. Toronto had 14,349 new listings, a 36.4% increase compared to the same month last year. Fraser Valley saw 2,098 new listings, a 3.7% increase compared to last year. Greater Vancouver saw 4,217 new listings, an increase of 31%. Last year these markets saw scarce inventory. This year we’re seeing inventory soar.
Consumer credit growth appears to be decelerating, which could be the first sign of the business downcycle. Bank of Canada numbers show that consumer credit growth fell to 4.9% on the annualized three month trend. This represents a 5.76% decline compared to the same time last year, but more important – it fell below the 12 month annual trend of 5.5%. The three month annualized trend falling below the 12 month is often the first sign that the direction of the trend will downcycle. This is an expected result of higher interest rates.
Toronto Real Estate
Statistics Canada just gave us the most comprehensive look at non-resident ownership of Toronto real estate. There’s a lot of great information we’ll be unpacking over the next few weeks, but the most interesting is the size of non-resident ownership, and the attraction to new builds. Non-residents own $37.37% of residential real estate in Toronto, about 3% of the total value of the city’s residential homes. They also own 10.52% of homes built after 2016. This means non-residents are buying over 1 in 10 new completions.
Vancouver Real Estate
Non-resident ownership of Vancouver real estate isn’t a huge secret, but now we finally have some numbers on the scale of the issue. Non-residents own $45.25 billion of residential real estate in Vancouver, about 5% of the total market. New construction is where it gets interesting however. Non-residents bought 1 in 5 homes built after 2016. It’s tough to figure out what the right level of non-resident ownership is of new construction, but we’re guessing a fifth of all new inventory probably isn’t it.
Like this post? Like us on Facebook for the next one in your feed.