Union City Condos floor plan . Is there a bubble in the Canadian housing market? Although I promised my friends to talk about the Canadian property market, I really picked up a pen to write, but found that this is not a topic that I can control.
I have not bought a house in the local area, and I do not communicate much with the local people. My understanding of the property market mainly depends on my observations, local real estate advertisements and the Internet, so it is inevitable that I am a little biased. This can only be regarded as an article on the Canadian property market in the eyes of foreign tourists. Here, I would like to talk about three main issues.
According to the global real estate bubble index released by UBS in 2017, Toronto and Vancouver in Canada are in the top 10, and Toronto is at the top of the list, becoming the city with the greatest risk of a real estate bubble. After Toronto, there are Stockholm, Munich, Vancouver, Sydney, London, Hong Kong and Amsterdam, involving many countries. In terms of “superstar cities”, the property bubble is global, which has something to do with the policy of “quantitative easing” in recent years. Economic growth, income growth and ultra-low interest rates will all push up house prices. Importantly, Chinese buyers played a big role in the real estate bubble in these big cities. Toronto and Vancouver in Canada are Chinese-populated areas. According to the statistics of Acer Rosen Consulting, “Canadian real estate absorbed about US $93 billion of investment from China from 2010 to 2015.”
The average house price in Toronto has doubled in 13 years, while rent and real income have increased by only 5% and 10% over the same period. It can be seen that there is a big gap between the two, and the risk of bubble has become prominent. The situation is estimated to be similar in Vancouver, which topped the list in 2016.