Universal city phase 3 . A house crash is coming?
Universal city phase 3 . A house crash is coming? The listing of Toronto apartments rose 215%.Please Visit: Universal city phase 3 to Get Your VVIP Registration Today!
As COVID-19 drags on, businesses, the job market and the wider market continue to take a hit. (CMHC), a Canadian mortgage and housing company, has been painting a grim picture of the Canadian housing market for some time, hinting that house prices will fall sharply.
The agency suspended its housing market assessment report for several months after February 2020 because there was not much housing activity data to analyze and provide forecasts. The latest report, based on preliminary data for the first quarter ending July 2020, is not optimistic about the market outlook.
There are more factors that continue to point to the coming serious housing market collapse.
Toronto’s housing market has long been a daunting market because of its high housing prices. The booming real estate market is beginning to show signs of trouble. September data from the Toronto area Real Estate Board showed a surge in the number of apartments for sale. This led to a sharp drop in rents and marked the beginning of a weakening trend for apartments.
The number of active listings of apartments reached a record level in September, surging 215% compared with the same period in 2019. At the same time, the total number of home listings in Toronto increased by 5.3% for the whole month. This trend means that apartment prices are likely to fall this month because demand is not as high as supply.
The surge in the number of apartments in Toronto shows the weakness of the Toronto housing market. Nevertheless, the rest, such as single-family homes in the city, are still reported to be active.
Overall, Canadians remain optimistic about the performance of the real estate industry. The low interest rate environment, government stimulus measures and a general belief in the inherent value of residential real estate seem to make Canadians hopeful.
The CMHC report for the third quarter of 2020 identified the obvious devastating impact of COVID-19-related shutdowns on the economy, which could lead to a second market crash and a fall in house prices. As a result of the pandemic, many industries, such as tourism, aviation, automobiles, oil and so on, began to struggle for survival.
There is no sign of an immediate remission in the pandemic, as the second wave of infections exacerbates the challenges facing these sectors of the economy. The result could be another recession that is much more severe than the one in March 2020.
Among the stakeholders of the collapse of the real estate market and major risky enterprises in the real estate market, the collapse of the real estate market may prove to be catastrophic. Ideally, you need to take steps to reduce your chances of entering the real estate market before the crash, so that you can protect yourself from the short-and medium-term effects of another housing crash.
If you are an investor with a significant position in bank stocks such as TSX:RY (NYSE:RY), you may need to reconsider asset allocation. The bank is known for its large exposure to the Canadian housing market. Housing failures across Canada could trigger a frenzied sell-off in Royal Bank of Canada shares.
Royal Bank of Canada reported an 18% year-on-year decline in net income through commercial and personal banking. The bank is currently trading at $97.71 a share. Its valuation is down 7.38% from the same period last year and 5.64% from the beginning of 2020. A big sell-off could lead to significant short-term losses for the company and its shareholders.
Signs of a weak economy and a weak Toronto housing market may mean that CMHC’s prediction of a serious housing market collapse may come true. It is wise to consider investing in safer assets that protect and increase your capital and reduce the risk of companies that are at risk on your TSX.