Tridel condos north york . The asking price of a bungalow is 2.2 million and there is no bubble? Canadian economists have recently issued a series of warnings that the bubble in the real estate market in Canada, especially Ontario, is getting bigger and bigger.
Potential buyers are playing with fire when they enter the market now. However, some real estate agents argue that the price of some properties is a little higher, or the asking price is a little higher, it cannot be said that there is a bubble in the market.
A real estate agent told the Toronto website NOW that, for example, there is a two-bedroom bungalow at the eastern end of Scarborough. Although there is only a two-bedroom and a bathroom, the asking price of 2.2 million is not much, nor can it be inferred that there is a bubble in the market.
The seller’s agent for the property for sale is Dan Hoffman of RE/MAX, a real estate company. He told him that the house is located in the West Hill neighborhood of Scarborough at 129Manse Road, not far from the intersection of Rouge and Guild, and its selling point is that it can be rebuilt and sold after the old one.
According to the sale advertisement, the property occupies a large land area of 119×112.42 feet. And the site has been approved to be divided into two parts, and buyers can build 5000 square feet of houses on each of the two sites.
Hoffman also calculated for the new buyer: if the construction cost of each new house is 1 million yuan, it adds up to an investment of about 4.2 million yuan. However, after the new owners have completed two houses, there is no problem in selling each flat at 3 million yuan, and the owners are still very profitable.
Just after the Bank of Canada left interest rates unchanged on Wednesday, David Rosenberg, a prominent economist, said in an interview with Bloomberg’s BNN television that Canada “may be experiencing one of the biggest bubbles in history.” Of course, this forecast will depend on the situation of mortgage interest rates. “
The economist is famous for accurately predicting the housing crash in the United States caused by the subprime crisis 15 years ago, when he was working at Merrill Lynch. He then founded Rosenberg Research&Associates, a consulting and investment company, in Toronto.
Rosenberg told television that the rise in housing prices was pointless when the labor market was severely damaged by the COVID-19 pandemic. He further pointed out: “the situation we are facing is that house prices are up 18 per cent year-on-year, while wages have barely increased.”
“the unemployment rate in our country is higher than it was at the peak of the last two recessions,” Rosenberg said. Therefore, I would like to say that there are still very serious deflationary loopholes in the labour market. “