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Average real estate prices in Toronto have risen by more than 200% over the past decade, and prices in Toronto have risen by as much as 30% to 40% in the past year.
1. Housing price.
There has been a general rise in real estate market prices in all parts of Canada. In the Toronto area, house prices have begun to rise like a rocket. Over the past year, home prices in the Toronto area have increased by 20% to 30% compared with the previous year. A long time ago, the average price of Canadian real estate outpaced that of the US real estate market. Since then, as the US housing bubble burst, home prices in some parts of the US have fallen by as much as 40 to 60 per cent.
2. Per capita housing ratio.
At present, about 70% of Canadian residents own their own homes, the highest proportion in the world. By contrast, on the eve of the bursting of the US housing bubble in 2006, the proportion of Americans owning homes was almost as high as Canada’s current level. Since then, as the housing market has collapsed, the proportion of housing per capita in the United States has fallen to its lowest level in the past 50 years.
3. Household debt ratio.
Total household spending in Canada has risen over the past decade, and the low interest rate environment is the main catalyst for stimulating consumer spending. As a result, the debt-to-income ratio of Canadian households is now as high as 169.4%, up from 146% in 2006.
4. The relationship between real estate industry and economic development.
Cranes used to build apartments have almost become a landscape in the Toronto area of Canada. At the same time, residential housing construction activity in other parts of Canada has also become very hot. At present, the real estate construction market accounts for as much as 12% of the total Canadian economy. From a historical point of view, in the last round of the US real estate bull market, the real estate market also became a major driving force of US economic growth.
5. the government denies that there is a bubble in the real estate market.
In 2005, Bernanke, then chairman of the Federal Reserve, said publicly that the sharp rise in prices in the US housing market mainly reflected very strong fundamentals of the US economy, including rapid job creation and population growth. Similarly, Bank of Canada Governor Poloz said in 2017 that although the real estate market in Toronto, Canada seems to be on the high side, the fundamental reason for the rise in house prices is that the fundamentals of Canadian economic growth have changed, among which jobs and population growth have become catalysts for house prices.