M city condos 5 for sale. The Canadian real estate bubble is strong. “the Canadian property market is facing a crash”, “plus’ subprime mortgage crisis’is imminent.” Concerns about risks in the Canadian property market have risen again over the past month as Home Capital Group, Canada’s largest non-bank mortgage lender, plunged into a liquidity crisis.Please Visit: M city condos 5 for sale to Get Your VVIP Registration Today!
New home sales prices in Canada rose for two months in a row, up sharply from the same period last year, according to data released by the Canadian Mortgage Real Estate Corporation (CMHC). The average price of a new home in Canada in April was C $751881 (US $559123), according to data. In Canadian dollars, it rose 11 per cent from a year earlier; in dollar terms, the increase was more moderate, at 2.64 per cent.
At the same time, US house prices have fallen. The average price of a new home in the United States in April was C $495271 (US $368300), according to the U.S. Commerce Department’s Census Bureau (US Census Bureau). In Canadian dollars, it is down 0.49% from a year earlier; in dollar terms, it is down 3% from a year earlier.
As a result, the average selling price of new homes in Canada is 51.8% higher than that in the United States, while in the same period last year, the average selling price of new homes in Canada was only 36% higher than in the United States. This shows that the divergence between the Canadian and US real estate markets is increasing.
If you take into account the differences in economic conditions between the two countries, the gap in house prices is even more unreasonable. The economy of the United States is recovering, and its population is 10 times that of Canada, but its land area is smaller than that of Canada. Canada, by contrast, is sparsely populated and its economy is unstable.
According to previous reports on Wall Street, Canada’s home ownership rate is currently 70%, the highest in the world, while the home ownership rate in the United States was about the same before the bursting of the housing bubble. The real estate industry currently accounts for 12% of Canadian GDP, and real estate was one of the main drivers of the economy during the US real estate bubble.
Last month, Home Capital Group, Canada’s largest non-bank mortgage supplier, plunged 65% on the day of the news, the biggest one-day drop in the company’s history, suspected of triggering a “Canadian version of the subprime crisis.”
However, the latest figures show that house prices in Vancouver hit another record high last month, with all kinds of home prices breaking through record highs, confirming the title of the biggest real estate bubble in history.
Statistics from the Greater Vancouver Real Estate Board in May show that:
The benchmark price of apartments in the region was C $571300, an increase of 17.8% year-on-year and 3.1% month-on-month.
The benchmark price of multi-family houses rose 13.1% from a year earlier, up 1.9% from a month earlier to C $715400.
The benchmark price of single-family homes rose 3.1 per cent year-on-year and 2.9 per cent month-on-month to C $1561000.
As shown in the figure below, the blue line represents the price trend of single-family houses, which have broken through last year’s highs; the prices of multi-family houses represented by the red line and apartments represented by the green line are both at record highs.
The crazy state of the Vancouver property market is seen as a mixture of money laundering, speculation and low interest rates. In August last year, British Columbia began imposing a 15% transfer tax on overseas buyers in an effort to cool the property market. Since then, Vancouver house prices have fallen, when the market thought that the Vancouver real estate market was beginning to normalize and turned its attention to Toronto, which is also booming, but recent data show that Vancouver house prices have begun another strong rebound.
The only decline in May was in the number of transactions, which fell 8.5 per cent to 4364 units from a year earlier, according to the data.
In other words, a 15% foreign property tax only curbs the pace of property transfers, and a new wave of more aggressive buyers have emerged who don’t seem to care about the 15% property tax.
As the chart below shows, soaring Canadian house prices have left American house prices far behind.
Household loans as a percentage of disposable personal income in Canada have far exceeded the peak in the United States around 2008, and the ratio is still on the rise. It is worth noting that a large proportion of household loans in this country are mortgages.
At the same time, Canada’s average household debt service rate, that is, debt service as a percentage of household income, is 40% higher than in the United States.