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However, house prices in the other nine major real estate markets, except Toronto and Vancouver, have passed their peak and are falling slowly, according to house price data released by the National Bank of Canada. As soon as the news came out, it triggered public opinion to discuss the inflection point of the property market.
The data show that house prices in cities such as Edmonton and Calgary have fallen sharply as falling oil prices have weighed on the economies of oil-producing provinces.
An article published in April by the The Economist, a leading British magazine, pointed out that house prices were 35 per cent overvalued compared with Canadian incomes.
Has the turning point in the Canadian property market really arrived? House prices in Toronto and Vancouver hit record highs in April. Among them, the average house price in the Greater Toronto area was about C $640000 (3.26 million yuan) in April, according to the latest data from the Toronto Real Estate Bureau.
According to the latest figures released by the Canadian Real Estate Association (CREA) on May 15, the average selling price of a house nationwide in April was about C $449000 (2.29 million yuan), up 9.5% from a year earlier. Among them, house prices in Toronto and Vancouver are the hottest areas in the two markets, rising 8.4% and 8.5% respectively in the same month, both of which recorded the largest increase in the country for three months in a row, and house prices have both reached historical records.
But the figures also show that, excluding Toronto and Vancouver, average house prices in Canada rose only 3.4 per cent month-on-month in April. Thus it can be seen that the boosting effect of Toronto and Vancouver is quite obvious. This can also be seen from the total population of the two cities. As of July 1, 2014, as Canada’s economic center and largest city, Toronto has a population of about 6.06 million, accounting for 17 percent of Canada’s total population, according to the Federal Bureau of Statistics of Canada. If you add in Vancouver, the economic hub of the west coast, these two places account for nearly 25% of Canada’s population.
“this is mainly because the Canadian dollar has fallen sharply so far this year, driven by low mortgage rates and demand from immigrants, mainly new immigrants and non-residents, as well as first-generation immigrants to buy homes for their children.” Sue Chen, a senior real estate agent in Toronto, said that taking interest rates as an example, local banks in Canada offer low interest rates as low as 2.64% at the current five-year fixed interest rate, and the funding threshold for non-residents to buy a house is also very low. Many banks have offered a down payment of 35% and the rest of the loan payment plan.
The demand of the migrant population to buy a house should not be underestimated. Just take immigrants from China as an example. China is one of the largest sources of immigration in Canada. According to Immigration Canada, in the four years from 2010 to 2013, the average number of immigrants (permanent residents) from China is 32000 per year.
Some industry insiders have pointed out that Toronto and Vancouver are already popular cities to attract immigrants, and Canada has recently opened 10-year visas to China, which is also an attraction for Chinese (including international students) to buy houses in Canada.
