South Forest Hill Residences address.What is the significance of Canadian real estate? Low benchmark interest rates have prompted more homeowners to choose higher loan lines, which has led to a sharp rise in house prices over the past two decades.Please Visit: South Forest Hill Residences address to Get Your VVIP Registration Today!
The rise in house prices in turn prompted homeowners to continue to increase their home equity credit lines, which is the so-called “wealth effect”.
There has been a huge debate over whether Canadian house prices, especially in Toronto and Vancouver, are overvalued. If the answer is yes, then the question is, how high is the valuation? Many people are wondering whether the housing bubble caused by overvalued house prices will burst in the near future. The reality is that only when the bubble bursts itself can we make sure whether the price of a house or any other asset is too high.
Given this uncertainty, what do we know about housing prices? Let’s first take a look at the changes in home prices in Toronto between 1970 and 2014. The long-term upward trend in home prices is still obvious.
It is not difficult to find that at some point the house price is significantly higher than the long-term trend line, while the house price will be lower than the long-term trend line for a period of time after that.
What causes it? If you have any memory of recent events, you should remember the economic downturn caused by the oil crisis in the mid-1970s, and the Federal Reserve raised its benchmark interest rate in the late 1880s to lower inflation to stimulate the economy.
However, there is a more inherent reason for the upward and downward trend of house prices and other asset prices, which is the “mean return”. In other words, the extreme value will always return to the average over a period of time, higher than the average will decrease, and below the average will rise.
