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[Windsor37]

With average prices up another 14%, Swiss bank UBS warns of housing bubbles in Canada

UBS says Toronto has second-biggest housing bubble in the world

Average house prices rose 14 per cent in the past year, the Canadian Real Estate Association said Friday, adding to concerns that Canada's most expensive real estate markets are dangerously overvalued.

The group that represents realtors across the country says the average price of a Canadian home sold on its MLS system was $686,650, almost 14 per cent higher than it was in the same month a year ago.

Canada's inflation rate hit four per cent in August, the fastest increase in the cost of living in almost 20 years. The new data on house prices Friday means that house prices are going up at more than three times that record pace.

CREA says the average price can be misleading, since it is heavily skewed by sales in the most expensive markets of Toronto and Vancouver. It trumpets another number, known as the MLS House Price Index (HPI), as a more accurate gauge of the overall market, because it strips out some of the volatility.

But the HPI is rising by even more than the average is right now — up 21.5 per cent in the past 12 months. In the Greater Toronto area, the average price of a home that sold was $1,136,280 in September, up 18 per cent in a year, according to the local real estate board. In Vancouver, the average is 1,186,100 — up by more than 13 per cent in the past year.

"There is still a lot of demand chasing an increasingly scarce number of listings, so this market remains very challenging," CREA chair Cliff Stevenson said.

The pandemic has had an unexpected impact on house prices in that instead of causing people to be more conservative because of the economic uncertainty, buyers have been eager to shell out for more space.

Canada's central bank slashed its benchmark rate to help stimulate the economy through the pandemic, and when lenders passed those rates on to consumers in the form of record low mortgage rates that had the effect of pouring gasoline on the fire of housing demand, making it more affordable to borrow more and more money to buy a home.


UBS warns of bubble
The fresh numbers on prices come as a major Swiss bank was already warning that Toronto and Vancouver are home to two of the worst housing bubbles in the entire world.

In an annual ranking, UBS examines the housing markets in 24 major world cities in Europe, North America and Asia to assess them based on how expensive housing is compared to local income levels and other factors.

It then puts all the cities into one of five categories:

• Depressed housing market (a score of -1.5 or lower).
• Undervalued (-0.5 to -1.5).
• Fairly valued (-0.5 to +0.5).
• Overvalued (+0.5 to +1.5).
• Bubble (1.5 and up).

Six cities were deemed to have housing bubbles. Two of them are in Canada.

Toronto got a score of 2.02. That was higher than every other city except Frankfurt, Germany, which scored a 2.16.

Vancouver scored a 1.66, just behind Hong Kong (1.90), Munich (1.84) and Zurich (1.83).

The bank says house prices in Toronto have effectively doubled in the past decade. Government interventions through things like foreign buyers taxes and rent controls caused the market to take a breather in 2018 and 2019, but things have only accelerated since, the bank said.

"Real prices increased by almost eight per cent from mid-2020 to mid-2021," the bank said.

The bank says price gains are being fuelled by record-low mortgage rates, which are not expected to last much longer once the Bank of Canada inevitably has to raise its rate.

That "could lead to an abrupt end to the current housing frenzy," the bank said.

Isabel Serrano, a prospective homebuyer in Toronto, is well aware of how frothy things have gotten in the city. She and her husband have been renting for the past 15 years, and are finally ready to buy. But despite having more than $200,000 a year in combined income, the pair can't find anything in their price range — and they keep getting outbid when they try.

In an interview with CBC News, she said she has looked at between 40 or 50 houses in the past few months, and placed offers on four. In some cases, the house sold for six figures more than the asking price.

"I never thought it was going to be this hard. I really didn't," she said. "It blows my mind that there are no homes to buy. It blows my mind that we cannot find a house to buy for $800,000."

I just hope it doesn't pop at the time that the economy is recovering. This could push back the current efforts to get Canada back on track. On one hand though, if you have a stable enough job at the time the "pop" happens or if you have been saving for awhile for a new home, then you could be looking in one of the best housing bargains in one of the best locations in the country.

 

[dankboi]

I just hope it doesn't pop at the time that the economy is recovering. This could push back the current efforts to get Canada back on track. On one hand though, if you have a stable enough job at the time the "pop" happens or if you have been saving for awhile for a new home, then you could be looking in one of the best housing bargains in one of the best locations in the country.

exactly what i thought. we must utilize this opportunity

 

[Windsor37]

exactly what i thought. we must utilize this opportunity

yes, but PPR first.

 

[GandiBaat]

I don't know how to drive, what else can I do on weekends?

I dunno, sleeping has worked decently for me.

 

[PRANIT01]

I just hope it doesn't pop at the time that the economy is recovering. This could push back the current efforts to get Canada back on track. On one hand though, if you have a stable enough job at the time the "pop" happens or if you have been saving for awhile for a new home, then you could be looking in one of the best housing bargains in one of the best locations in the country.

If the bubble burst on 2022 then those ircc assholes will say because of that we are currently not processing applications and fsw can go and fuck themselves.
1.covid
2.vaccine
3. Border opening
4.election
5.Refugees

They are contemplating wtf should be their next excuse this is a good candidate.

 

[seadrag0n]

Jokes apart, you really don't drive? I think you will need a car in Canada at some point so it's the perfect time to learn.

Nope, didn't even try to learn. I read that learning to drive from scratch and getting a licence in Canada is expensive and a big hassle which is sadge.

 

[seadrag0n]

With average prices up another 14%, Swiss bank UBS warns of housing bubbles in Canada

UBS says Toronto has second-biggest housing bubble in the world

Average house prices rose 14 per cent in the past year, the Canadian Real Estate Association said Friday, adding to concerns that Canada's most expensive real estate markets are dangerously overvalued.

The group that represents realtors across the country says the average price of a Canadian home sold on its MLS system was $686,650, almost 14 per cent higher than it was in the same month a year ago.

Canada's inflation rate hit four per cent in August, the fastest increase in the cost of living in almost 20 years. The new data on house prices Friday means that house prices are going up at more than three times that record pace.

CREA says the average price can be misleading, since it is heavily skewed by sales in the most expensive markets of Toronto and Vancouver. It trumpets another number, known as the MLS House Price Index (HPI), as a more accurate gauge of the overall market, because it strips out some of the volatility.

But the HPI is rising by even more than the average is right now — up 21.5 per cent in the past 12 months. In the Greater Toronto area, the average price of a home that sold was $1,136,280 in September, up 18 per cent in a year, according to the local real estate board. In Vancouver, the average is 1,186,100 — up by more than 13 per cent in the past year.

"There is still a lot of demand chasing an increasingly scarce number of listings, so this market remains very challenging," CREA chair Cliff Stevenson said.

The pandemic has had an unexpected impact on house prices in that instead of causing people to be more conservative because of the economic uncertainty, buyers have been eager to shell out for more space.

Canada's central bank slashed its benchmark rate to help stimulate the economy through the pandemic, and when lenders passed those rates on to consumers in the form of record low mortgage rates that had the effect of pouring gasoline on the fire of housing demand, making it more affordable to borrow more and more money to buy a home.


UBS warns of bubble
The fresh numbers on prices come as a major Swiss bank was already warning that Toronto and Vancouver are home to two of the worst housing bubbles in the entire world.

In an annual ranking, UBS examines the housing markets in 24 major world cities in Europe, North America and Asia to assess them based on how expensive housing is compared to local income levels and other factors.

It then puts all the cities into one of five categories:

• Depressed housing market (a score of -1.5 or lower).
• Undervalued (-0.5 to -1.5).
• Fairly valued (-0.5 to +0.5).
• Overvalued (+0.5 to +1.5).
• Bubble (1.5 and up).

Six cities were deemed to have housing bubbles. Two of them are in Canada.

Toronto got a score of 2.02. That was higher than every other city except Frankfurt, Germany, which scored a 2.16.

Vancouver scored a 1.66, just behind Hong Kong (1.90), Munich (1.84) and Zurich (1.83).

The bank says house prices in Toronto have effectively doubled in the past decade. Government interventions through things like foreign buyers taxes and rent controls caused the market to take a breather in 2018 and 2019, but things have only accelerated since, the bank said.

"Real prices increased by almost eight per cent from mid-2020 to mid-2021," the bank said.

The bank says price gains are being fuelled by record-low mortgage rates, which are not expected to last much longer once the Bank of Canada inevitably has to raise its rate.

That "could lead to an abrupt end to the current housing frenzy," the bank said.

Isabel Serrano, a prospective homebuyer in Toronto, is well aware of how frothy things have gotten in the city. She and her husband have been renting for the past 15 years, and are finally ready to buy. But despite having more than $200,000 a year in combined income, the pair can't find anything in their price range — and they keep getting outbid when they try.

In an interview with CBC News, she said she has looked at between 40 or 50 houses in the past few months, and placed offers on four. In some cases, the house sold for six figures more than the asking price.

"I never thought it was going to be this hard. I really didn't," she said. "It blows my mind that there are no homes to buy. It blows my mind that we cannot find a house to buy for $800,000."

Who in their right mind will buy a house in Canada and get tied down forever, just get your citizenship and move to EU or something.

 

[Deleted member 1050918]

Who in their right mind will buy a house in Canada and get tied down forever, just get your citizenship and move to EU or something.

What's so funny is no Canadian asks the question why on earth do we end up with a real estate bubble while having literally a quarter of the entire continent of America. Ridiculous amount of land, still, ridiculous housing prices. It gets funnier when they blame immigrants for it lol. Maybe vote for a government that actually knows how to build houses next time eh?

 

[seadrag0n]

What's so funny is no Canadian asks the question why on earth do we end up with a real estate bubble while having literally a quarter of the entire continent of America. Ridiculous amount of land, still, ridiculous housing prices. It gets funnier when they blame immigrants for it lol.

It's because those big real estate companies are lobbying the government to keep the prices high, they always threaten with job losses which will be a much bigger headache for the government than a fked up housing market. Cleary there is more empty land than Canadians will ever need.

 

[GurpreetKalra23]

It's because those big real estate companies are lobbying the government to keep the prices high, they always threaten with job losses which will be a much bigger headache for the government than a fked up housing market. Cleary there is more empty land than Canadians will ever need.

Does canada has most of land which can be habited ? Or is is like most of the land is not liveable due to oil and gas, heavy snow etc etc

 

[seadrag0n]

Does canada has most of land which can be habited ? Or is is like most of the land is not liveable due to oil and gas, heavy snow etc etc

No, there is plenty of land near the big cities, the problem is more houses are not getting built because doing that will drive down the value of existing properties which the profit chasing real estate developers don't want. I also read that many of these empty lands were bought up by foreign investors to resell them later at a profit.

 

[GurpreetKalra23]

No, there is plenty of land near the big cities, the problem is more houses are not getting built because doing that will drive down the value of existing properties which the profit chasing real estate developers don't want. I also read that many of these empty lands were bought up by foreign investors to resell them later at a profit.

Holy Crap! Why you would pay a million dollar just for a house.

Sometimes(Read as most of times) I feel Canada needs a political shakeup

 

[Deleted member 1050918]

It's because those big real estate companies are lobbying the government to keep the prices high, they always threaten with job losses which will be a much bigger headache for the government than a fked up housing market. Cleary there is more empty land than Canadians will ever need.

Pretty dumb to vote for governments puppets to some lobbyists but what do I know? Not my problem lol whatever

 

[seadrag0n]

Holy Crap! Why you would pay a million dollar just for a house.

Sometimes(Read as most of times) I feel Canada needs a political shakeup

It is my opinion that the older generation and the rich are in control of all of this and the younger generation just doesn't care or don't want to care about all this crap, no wonder Canada is having a population problem.

 

[Windsor37]

Who in their right mind will buy a house in Canada and get tied down forever, just get your citizenship and move to EU or something.

I'm looking at it, while the EU is definitely a great candidate. I feel that I won't have the necessary perseverance to adapt to a new language. Ireland, maybe, if a good enough semiconductor design sector takes root there, but looking at how things are, it's quite unlikely.

Personally, I'd settle in Canada if all goes well, since it has the balance of language, culture, work opportunities and standard of living that I'd be able to be happily content with. The only that thing that might tempt to look at immigration again once I have a Canadian Citizenship, is if an opportunity to work in Silicon Valley appears, especially with one of the more prominent firms like Apple, or Nvidia. But with AMD, Intel, and Qualcomm, already having R&D centers in Canada, I have to say, there's already a lot of opportunity in the country, at least for my line of work.