m city 5 condos price list.The Canadian real estate bubble. The Canadian dollar continued to strengthen due to weak US economic data and the signal from the Bank of Canada.Please Visit: m city 5 condos price list to Get Your VVIP Registration Today!
Last Wednesday’s decision by the Bank of Canada to raise interest rates by 25 points for the first time in seven years pushed the value of the Canadian dollar to its highest level since May 2016. After reaping enough profits, investors must now remain calm and re-examine the Canadian economy.
The real estate bubble has become a major hidden worry for the Canadian economy. Its real estate market began to be hot before the subprime crisis, and gradually became the main driving force of GDP growth. But what is worrying is that there are a large number of speculators in the housing market, and the vast majority of them are responsible for home loans. The increasing repayment pressure caused by monetary tightening leads to default, which is the last straw to crush the housing market.
In May this year, the Canadian mortgage company Home Capital first appeared problems, a serious run crisis, thanks to Ontario pension fund emergency loans of C $3 billion to survive. But this is only a drop in the bucket, suspending the problem, and corporate customer deposits worth tens of billions of dollars are about to mature. The problem is understood to have been caused by defaults on a large number of its home loans. Mortgage default rates are generally low because every company has strict vetting procedures and stringent application conditions, but due to the hot housing market in previous years and the rapid expansion of mortgage demand, many companies have relaxed regulation in order to improve their performance. There are even reports that some managers of mortgage companies will even help customers who do not meet the conditions to falsify information.
According to Equifax Canada, a consumer credit consultancy, the number of suspicious mortgage applications has surged 52 per cent since 2013, with 13 per cent of Canadians saying it is acceptable to fake their mortgages and 8 per cent of Canadians admitting to fraud.
In the face of a bubble that could burst at any time, speculators dare not enter the market, and buyers with rigid demand wait for cheaper houses, so the market’s willingness to buy houses drops sharply. Data released by the Canadian Real Estate Association on Monday showed that Canadian real estate sales fell 6.7% in June from the previous month, the biggest decline since 2010. This is the third consecutive month of decline in Canadian real estate sales, and the second consecutive month of decline of more than 6%. Compared with the same period last year, it decreased by 11.4%. Some analysts believe that under the influence of the gradual introduction of housing regulation and control policies, the investment ability of investors who mainly speculate investors has been limited, and the willingness of ordinary home buyers to change purchases has also decreased with the decline in house prices. The Canadian real estate market is shifting from the seller’s market to the buying market.
It never rains but it pours. While mortgage defaults occur frequently and the housing boom begins to fade, the Bank of Canada suddenly quickly raised its benchmark interest rate. This has led to a rise in loan interest rates directly linked to the benchmark interest rate, and there has been a sharp increase in the repayment pressure of investors who originally held large home loans in Canada, and some of them have non-compliant loans and poor ability to repay themselves. due to the dual impact of falling housing prices and difficulties in selling, the possibility of mortgage default has also increased significantly.
These scenes are familiar and reminiscent of the subprime crisis in the United States. Recently, the number of investors in the market who hold the view of the imminent Canadian housing bubble has also become more widespread, and the bubble bursting panic has further spread. If the combination of these factors leads to the expansion of the run crisis of Canadian mortgage companies and the outbreak of the real estate bubble, not only a large number of mortgage companies will face bankruptcy, but also the housing deposits of ordinary people will suffer losses. the entire Canadian economy will be adversely affected.