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Volume and prices fell in May, and it is believed that the biggest real estate bubble in Canadian history may begin to burst. Since the 2008 financial crisis in the United States.
Data released by the Toronto Real Estate Board on the 5th local time showed that real estate in Toronto fell in volume and prices in May, with the average selling price of all types of houses at C $863910 (C $1), down 6.2% from C $920791 in April. Although the number of houses available for sale increased by 19%, the volume of transactions fell 12% month-on-month.
In fact, since late April, various jokes about the fall in Canadian house prices, such as “going to the subprime crisis” and “waiting for a house to be tied up”, have spread in the “moments” of Chinese Canadian Wechat. This makes Chinese “home buyers” who are already uneasy by the Canadian government’s previous real estate regulation policy can not help but feel frightened.
In march, the Toronto property market rose by 30% in a single month, the highest in history. In order to curb the rapid rise in house prices, the Ontario government, where Toronto is located, announced a series of measures to cool the housing market in April. One of the rules is that Ontario will impose a 15% tax on home buyers who are not Canadian nationals or permanent residents and who do not live in Ontario homes.
Another reason for this panic among Chinese “home buyers” is the “Home Capital crisis” that broke out in Ontario since mid-April. In April, the Ontario Securities Commission accused Home Capital Group, Canada’s largest non-bank mortgage supplier, of misleading investors into applying for home loans without knowing the conditions, according to the Globe and Mail of Canada. After the news, the company’s stock price plummeted, which in turn triggered a chain reaction of banks, mortgage companies and other surrounding stocks, making the “subprime crisis” more sensational. On May 25th, Royal Bank of Canada, a commercial bank of Canada, made it clear that the “Home Capital crisis” did not constitute a systemic risk to Canadian finance. Facts have proved that the “subprime crisis” is likely to be a false alarm.