M city condos 5. Canadian house prices exceed that of the United States by 40%. The soaring Canadian property market and overseas buyers, including the Chinese, are attracting more and more attention.Please Visit: M city condos 5 to Get Your VVIP Registration Today!
In March, Canadian house prices exceeded C $500000 (US $380000) per house, 40 per cent higher than in the US over the same period. In addition to local demand, overseas buyers, including the Chinese, are also pushing up. According to the 21st Century Economic report and related reports, Chinese buyers invested hundreds of billions of yuan a year in the Canadian property market between 2014 and 2015.
Spurred by low interest rates and a hot housing market, Canada’s personal debt ratio has risen rapidly, surpassing the level seen in the US before the 2008 financial crisis. People from all walks of life have warned that once interest rates are raised, the housing bubble will burst. But at the same time, due to the lack of other bright spots in the economy, it is difficult for the Canadian government to “operate” on the property market.
At present, the Canadian government has begun to investigate the purchase of houses by foreigners, and an increase in interest rates is still under discussion. Where will Chinese buyers go? Even if house prices fall, Chinese buyers may not withdraw, but turn to more areas outside Vancouver and Toronto, according to the 21st Century Business Herald.
The Canadian Mortgage and Housing Corporation told the 21st Century Business Herald that it is investigating how many new homes in Vancouver, Toronto and Montreal have been sold to foreigners and is expected to get preliminary results in November. In addition, the government has also conducted consultations on foreign buyers with developers, data providers, industry associations, intermediaries and lawyers in the three regions, which are currently in the final stage.
Since around 2006, Canadian house prices have rapidly overtaken those of the United States in a short period of ten years. Sal Guatieri, a senior economist at the Bank of Montreal of Canada (BMO), pointed out in a report earlier this month that recently, for the first time in history, average property prices in Canada exceeded C $500000 per house, or about $380000, compared with an average price of about $270000 in the United States in March.
House prices in Canada hit another record high in April, according to data released by the Canadian Real Estate Association (CREA). The average price increased by 13.1% over the same period last year, especially in Vancouver and Toronto, where house prices have risen for months in a row. But excluding the two cities, average property prices across Canada still rose 8.7% in April from a year earlier. The data also show that house prices in Greater Vancouver and Greater Toronto rose 25.3% in April and 12.6% in Greater Toronto compared with April last year.
Insiders at RE/MAX, Canada’s largest real estate brokerage market share, told the 21st Century Business Herald that the company conservatively estimated that Chinese buyers’ transactions in Canada reached $15 billion in 2014 (more than 90 billion yuan at exchange rates) and more in 2015. Chinese buyers invested 12.7 billion Canadian dollars (64 billion yuan) in the Vancouver property market in 2015, accounting for 33 percent of the city’s total, according to Peter Routledge, an economist at the National Bank of Canada. He estimates that in Toronto, the figure is 9 billion Canadian dollars (45.4 billion yuan), accounting for 14% of total sales.
The Canadian Mortgage and Housing Corporation, the official agency, told the 21st Century Business Herald that it is conducting a survey on foreign home purchases, including an investigation into how many new homes have been sold to foreigners in Vancouver, Toronto and Montreal.
“in the early 1990s, I emigrated with my parents to Vancouver, Canada. Our family has a separate house near Fisherman’s Wharf, some distance from downtown Vancouver. The market price in 2009 was 500000 Canadian dollars. Now it can sell for 1.6 million Canadian dollars (about 8.12 million yuan). Now locals have to wait in line to buy a house. In the past, when they sold a house, they usually received two or three bids, but now they can receive more than 40 bids, all of which are sold in cash. ” Mr. Wang, a Chinese Canadian living in Shanghai, told the 21st Century Economic report.
There are many reasons for the growth of the Canadian property market. First of all, Canadians have a tradition of buying houses, and their home ownership rate is among the highest in the world, reaching 69% to 70%.
“sustained local demand is one of the main reasons for the long-term strength of the property market, especially the low interest rate environment that has lasted for several years, which has catalyzed the demand for housing purchases. Because of Canada’s strict loan scrutiny, subprime loans are very small, which almost saved the country from the 2008 financial crisis. As a result, people have more confidence in the economy, and the property market has not been hit. In addition to local demand, I think external demand has also played an important role in driving the Canadian property market. In the wake of the financial crisis, foreign buyers, including Chinese ones, poured in when they saw the resistance of Canadian real estate. Some investors even bought the whole building before they even started construction. ” A senior Canadian real estate practitioner, who spoke on condition of anonymity, analyzed to the 21st Century Economic Reporter that he had previously worked as a deputy general manager of a large property agency in Canada.