Festival Condos In Vaughan.House prices are 50% higher than in the United States. Marc Cohodes, a gold short seller on Wall Street, said that the housing bubble in Canada was no less than that during the subprime mortgage crisis in the United States.Please Visit: Festival Condos In Vaughan to Get Your VVIP Registration Today!
Warnings about the risks of the Canadian housing market are getting louder and louder, so how serious is the Canadian housing bubble? You might as well learn about it by comparing it with your neighbor, the United States.
New home sales prices in Canada rose for two months in a row, up sharply from the same period last year, according to data released by the Canadian Mortgage Real Estate Corporation (CMHC). The average price of a new home in Canada in April was C $751881 (US $559123), according to data. In Canadian dollars, it rose 11 per cent from a year earlier; in dollar terms, the increase was more moderate, at 2.64 per cent.
At the same time, US house prices have fallen. The average price of a new home in the United States in April was C $495271 (US $368300), according to the U.S. Commerce Department’s Census Bureau (US Census Bureau). In Canadian dollars, it is down 0.49% from a year earlier; in dollar terms, it is down 3% from a year earlier.
The trend chart of house prices in US dollars between the two countries. The trend chart of house prices in US dollars between the two countries.
As a result, the average selling price of new homes in Canada is 51.8% higher than that in the United States, while in the same period last year, the average selling price of new homes in Canada was only 36% higher than in the United States. This shows that the divergence between the Canadian and US real estate markets is increasing.
If you take into account the differences in economic conditions between the two countries, the gap in house prices is even more unreasonable. The economy of the United States is recovering, and its population is 10 times that of Canada, but its land area is smaller than that of Canada. Canada, by contrast, is sparsely populated and its economy is unstable.
According to previous reports on Wall Street, Canada’s home ownership rate is currently 70%, the highest in the world, while the home ownership rate in the United States was about the same before the bursting of the housing bubble. The real estate industry currently accounts for 12% of Canadian GDP, and real estate was one of the main drivers of the economy during the US real estate bubble.
Wall Street short seller Marc Cohodes, who has been shorting the Canadian real estate market since 2015, has told the media that the Canadian housing bubble is no less than that of the subprime mortgage crisis in the United States, calling the crazy state of the Vancouver housing market a mixture of money laundering, speculation and low interest rates.
Last month, Home Capital Group, Canada’s largest non-bank mortgage supplier, plunged 65% on the day of the news, the biggest one-day drop in the company’s history, suspected of triggering a “Canadian version of the subprime crisis.”
