Union City Condos location . The Canadian housing market could collapse. Over the past few decades, many developed countries in the world have mostly relied on debt to develop their economies and formed the habit of being pampered and spending ahead of time.
At the same time, relying on foreigners to invest in the property market and other assets to run the economy has also become an important source of income in many developed countries, among which the Canadian economy is very obvious.
This means that under the impact of novel coronavirus, the Canadian economy is more likely to get into trouble. On the one hand, the risk of the debt crisis has increased, on the other hand, the number of global buyers investing in the Canadian property market has plummeted.
In the latest development, the Vancouver Sun reported on April 10 that the survey conducted by Dart&Maru/Blue found that 1 million Canadians were facing bankruptcy. At the same time, a larger group, 4.2 million Canadian adults, believe that unless their personal financial situation improves, they think they will go bankrupt within the next three months. This figure is more than 10% (more than 37 million) of Canada’s total population.
According to a report by Canadian media three weeks ago, at present, Canada’s federal, provincial and household debt has pushed Canada’s debt-to-GDP ratio to more than 281%. Among them, the ratio of Canadian household debt to disposable income continues to set a record, reaching 170% a few weeks ago, which means that Canadian households have about 170 yuan of debt for every 100 yuan of disposable income. Obviously, the risk of a debt crisis in the Canadian economy is very high.
Riaz Ahmed, chief financial officer of TD Bank in Toronto, said bankruptcy was part of Canada’s economic problems. In addition to the fact that Canadians are addicted to the debt economy, David Lewis, director of the Canadian Association of bankruptcy and restructuring Professionals, said another reason for this is Canada’s weak housing market. It is worth noting that global investors, including Chinese buyers, have left Canada significantly ahead of schedule for months in a row.
In another development, according to Canadian media reports, Canadian real estate companies said that due to novel coronavirus’s impact on the Canadian economy, the number of Chinese buyers buying Vancouver real estate has dropped sharply. This leads to the difficulties faced by many Canadian real estate companies. Shares of real estate companies such as Brookfield Property Partners LP in Canada, for example, have fallen by more than 50 per cent. Bob Dugan, chief economist of the Canadian Mortgage and Housing Corporation, said: the Canadian housing market is on a downward trend in March. Economic activity in Toronto and Montreal showed a downward trend, reflecting a larger decline in their respective provinces. It is expected that by the summer of 2020, the Canadian housing market may really collapse.