Canadian property bubble

Last updated

The Canadian property bubble refers to a significant rise in Canadian real estate prices from 2002 to present (with short periods of falling prices in 2008, 2017, and 2022) which some observers have called a real estate bubble. The Dallas Federal reserve rated Canadian real estate as "exuberant" beginning in 2003. [1] From 2003 to 2018, Canada saw an increase in home and property prices of up to 337% in some cities. [2] In 2016, the OECD warned that Canada's financial stability was at risk due to elevated housing prices, investment and household debt. [3] By 2018, home-owning costs were above 1990 levels when Canada saw its last housing bubble burst. [4] Bloomberg Economics ranked Canada as the second largest housing bubble across the OECD in 2019 [5] and 2021. [6] Toronto scored the highest in the world in Swiss bank UBS' real estate bubble index in 2022, with Vancouver also scoring among the 10 riskiest cities in the world. [7] By 2023 Canada’s nonfinancial debt exceeded 300% of GDP [8] and household debt surpassed 100% of GDP, both higher than the levels seen in the United States before the 2008[ dubious – discuss ] global financial crisis. [9] [10]

Contents

History

Background factors

Canada's last housing busts happened during the early 1990s recession, when Canada was facing low commodity prices, [11] a large national debt and deficit that was weakening the value of the Canadian dollar, the possibility of Quebec independence, and a recession in Canada's main trading partner, the United States. Average house prices declined by over 27% in Greater Toronto from 1989 to 1996. [12] Vancouver’s first housing bubble burst in 1981, the second declined gradually in 1994. [13] Otherwise, Canadian housing prices from 1980 to 2001 stayed within a steady and narrow range of 3 to 4 times provincial annual median income, [14] with little effect anywhere outside of these two cities. [13]

The 2000s commodities boom (caused by rising demand from emerging-market economies such as China) boosted economic activity, particularly business investment, which generated job growth in Canada. [15] During this time, significant rural-to-urban migration and immigration to Canada likely contributed to the pressure on house prices. [16] By 2010, Canada began experiencing, for the first time since 1980, a synchronized housing bubble across the six largest residential real estate markets in Canada, which represent approximately 40% of all real estate sales in Canada. [17] [13]

Although representing only a minority of real estate investors in Canada (less than 5%), [18] foreign investors are often blamed for the housing crisis by the public. Targeting them has proven politically popular [19] and a temporary ban on foreign buyers was put into effect from Jan 1, 2023 until 2025. [20]

This influx of foreign investment was reinforced by local speculative activity facilitated at a steady drop in interest rates. Once the pattern of rising prices was established, consumers interpreted this as proof that the real estate market had become the perfect option for stable, long-term investments. There is debate on which group of investors, overseas or domestic, play a bigger role in driving rising prices. [21] The belief that there was a limited supply of homes on the real estate market quickly brought new consumers into the market. In addition, owning a home is a sought-after ideal for many young adults in Canada. These social pressures, along with increasing opportunities for profit, were the driving forces behind the growth of the market, causing first-time home buyers to struggle to find affordable housing. [22]

In March 2017, the cost of owning a single-family house in the Greater Toronto Area had grown 33% in 12 months. [23] Even less desirable semi-detached homes had surpassed C$1 million in value. Suburban areas had seen large price increases as well. Homes that had not seen upgrades in decades were being sold well over the asking price. Condominium prices were consistently growing each year, even though a large number of units were under construction. [22]

Attempts to slow growth 2016 - 2017

In response to these trends, the provincial governments attempted to slow the growth of the real estate market and gradually bring down prices, in order to aid first-time home buyers in a way that would cause the bubble to shrink slowly rather than burst. In 2016 British Columbia instituted a 15% foreign buyer's tax, termed the National resident Speculation tax. [24] In 2017, Ontario followed suit. [25] In addition, the province of Ontario's Fair Housing Plan set in place stricter rent controls. Uninsured buyers were now required to pass a stress test, in order to see if they can handle a rise in interest rates. [26] These small remedies can account for a slight dip in housing prices in 2017. [27] Ontario created a Fair Housing Plan consisting of 16 measures to help combat the growth of the real estate market and make housing more affordable. [26] The 16 measures are summarized below. [28]

  1. Non-resident speculation tax
  2. Rent is only allowed to rise at rates posted in annual provincial rental increase guideline
  3. Develop standard leases that would further help protect tenants and insure landlords
  4. Create a program to balance the value of surplus land assets
  5. Put a vacant properties tax into place
  6. Tax to ensure new apartment complexes are similar to current complex properties
  7. Introduce a 5-year program to facilitate the building of more rental apartments
  8. Make it easier to use property taxes to generate more development opportunity
  9. Create Housing Supply team to help uncover and fix barriers to housing development
  10. Work to fight tax avoidance practices
  11. Reassess rules involving customer representation in real estate transactions
  12. Creating a housing group to advise the government about the state of the housing market
  13. More education for consumers about their real estate rates
  14. Create more thorough reporting requirements for real estate sales
  15. Improve reliability of elevators in Ontario buildings
  16. Updating the Growth Plan for the Greater Golden Horseshoe

These measures have failed to mitigate the property bubble.

2018 and 2019

Canada's price-to-rent ratio surpassed the levels of the US housing bubble in 2006. The private sector debt-to-GDP ratio also rose to 218% in 2018, causing the IMF to warn the country was extremely vulnerable to economic shocks. [2] The Swiss Bank UBS Global Real Estate Bubble Index ranked Toronto and Vancouver as the third and fourth most at risk cities for housing bubble crises. In Alberta, despite a recession and high unemployment, prices still remained high. [22]

The Canadian Mortgage and Housing Corporation cited overbuilding as the main source of the country's housing bubble risk. [29] The amount of household debt in Canada surpassed national GDP. [30]

In April 2019, the Bank of Canada released a report entitled "Disentangling the Factors Driving Housing Resales" in which they stated Canada's housing market is "currently in uncharted territory."[ clarification needed ] [31] While the report does not use the word "bubble," instead using the term "froth," to describe the current state of housing market, it states the rapid increase in pricing in certain markets can be attributed to an unexpectedly robust labour market and fear on the part of buyers of being priced out of the market. The report states, "Much of the previous strength in resale activity was influenced by extrapolative expectations." [31] The report concludes that with increases in household debt, stagnant wages and expected rises in interest rates, a snap-back may be inevitable.

The Bank of Canada estimates that investors, defined as owners who borrow to buy a secondary property while maintaining a mortgage for a primary property, account for around 20% of all home purchases in Canada between 2018 and 2019. [32] StatsCan's Canadian Housing Statistic Program estimated in a 2019 report that one third of the Toronto condo market is owned by people who do not personally live in the units but rent them out or leave them empty. [32]

March 2020 to February 2022

The housing market experienced a brief slowdown during the onset of the pandemic, especially for condos in larger cities. [33] In response to the pandemic, the Bank of Canada slashed interest rates three times in one month [34] and reduced the mortgage "stress test" rate, which enabled buyers to qualify for slightly larger mortgages. [35] Prices soon rebounded. By June 2020, detached home prices had increased in 95% of Toronto districts, with double-digit increases in most (55%) of them. [36]

This defied many predictions, including those by the CMHC, which had forecasted prices falling by 9–18%. [37] Instead, by the end of 2021, the Canadian Real Estate Association's House Price Index had risen by 26.6%, the fastest annual pace on record. [38]

On Feb 23, 2021, Bank of Canada Governor Tiff Macklem said the Bank was only starting to see "early" signs of "excessive exuberance". In a Q&A, he said the Bank was not considering any additional measures to cool the market, [39] saying, "We need the growth." [40] While other countries were attempting to cool their overheated markets, Canada was not, citing concerns about the economic recovery. [41] The Bank indicated that it would continue to hold firm on low interest rates until likely 2023, [42] resisting calls from investors and economists [43] that higher rates were needed to cool the market. However, by mid-June, with fiscal spending booming and households flush with cash from stimulus, investors expected the Bank of Canada to begin raising rates in 2022. [44]

In early 2021, Maclean's reported that zoom towns, popular with remote workers, were experiencing population growth at the expense of major urban centres. Notably:

Statistics Canada data on population movement shows that from July 1, 2019 to July 1, 2020, Toronto and Montreal posted record population losses, while Halifax grew the second-fastest of any major urban area, and Moncton also grew faster than average. Housing prices have soared as people across Canada buy property in the Maritimes sight unseen through virtual tours, with Fredericton’s U-Haul dealer struggling to keep up with all the people renting moving trucks in Ontario and Quebec and trying to drop them off at its lot. [45]

During the COVID-19 pandemic in Canada statistics showed that the housing sector grew but much of the rest of the Canadian economy did not. Jeremy Kronick, associate director of research at the C.D. Howe Institute specified that "data from Statistics Canada show that, for the first time on record, investment in the housing market is now greater than 50 per cent of all investment in the Canadian economy". [46]

In March 2022, Oxford Economics forecasted a 24% drop in Canadian home prices by mid-2024, unless higher interest rates and anti-speculation policies fail. Were home prices to rise further (in this latter scenario), a crash of 40% and a financial crisis is to be expected. [47] Housing became the least affordable in Canadian history according to the Royal Bank of Canada's housing affordability index in early 2022, and has worsened since. [48]

2022 dip and 2023 recovery

Starting in February 2022, average Canadian home prices started to decline rapidly. [49] The Bank of Canada began hiking interest rates on March 2 2022. [50] Prices for detached houses had declined by almost $400,000 in the Greater Toronto Area by September 2022. [51] As the Bank of Canada hiked the overnight interest rate above 4% to combat inflation, mortgage rates rose above 5.5% putting pressure on borrowers. Inflation accelerated due to the energy crisis; at the time there was no upper limit on how high interest rates might go to bring down inflation. [52] The Teranet-National Bank House Price Index peaked in May 2022 and had dropped 10% by mid-January 2023, the “largest contraction in the index ever recorded” since it began in 1999. Contractions from the peak to January 2023 were notable in London (-26%), Cambridge (-25%), Kitchener-Waterloo (-25%), Brantford (-24%), Hamilton (-23%), the Niagara region (-20%) and Barrie (-20%). [53]

However, by October 2023, prices were no longer falling and were even rising in many cities and provinces, surprising forecasters. The average price was up marginally month over month and, 1.8% year over year. [54] "Benchmarks" which adjust for house sizes and seasonal trends, were not as strongly up as averages, but regional disparities were very noticeable with benchmark prices in Calgary haven risen by 9.4 per cent in the previous year, to its highest level on record. [54]

2023 Foreign ownership ban

On January 1, 2023, Canada enacted a law prohibiting foreigners, except for immigrants and permanent residents, from acquiring residential areas in the country for two years in response to a real-estate bubble. [55]

Regional differences

Some commentators have stated that Canada as whole did not have a real estate bubble, only Toronto and Vancouver really did. [56] [57] As is typical in all countries, prices vary widely between urban and rural areas, between regions, and between cities within a region. However, as Canadian regions have very different economic bases, the impact of the price increases of the twenty-first century have been almost diametrically opposed in two types of cities: metropolitan regions based on financial services, manufacturing, international trade, services and tourism (the Golden Horseshoe, the Lower Mainland, Southwestern Ontario) have tended to move up most strongly when cities based around resource extraction (e.g. the Calgary-Edmonton Corridor) are flat or declining. Conversely, resource-dependent cities have had periods of stronger growth than services-focused cities during periods of resource price spikes.

Economic growth, migration rates, and therefore housing prices in Alberta, Saskatchewan, and Newfoundland and Labrador are tied to oil and gas prices, and therefore experienced their strongest growth during and immediately following the oil price spikes of 2003–2008 and 2009–2014. Growth slowed or reversed during and after the oil price drops of 2008–2009 and 2014–2016. The impact of the short-lived 2020 price crash was limited: average housing prices in Alberta overall did not drop year-to-year from 2019 to 2020 as many had predicted, but did drop slightly in Calgary.

Vancouver has experienced more direct foreign investment than other Canadian cities since the 1990s, as well as strong in-migration and has therefore increased faster than the rest of the country. High prices in Vancouver have pushed middle class buyers out to other parts of British Columbia.

Much like in British Columbia, in Ontario the fastest rising prices have been in the main urban centre, Toronto, which, like Vancouver is a major hub for foreign investment and immigration. Rising prices elsewhere in Ontario may be a ripple effect radiating out from Toronto.

Until 2020, Quebec and the Maritime provinces had not seen as dramatic growth in prices as the rest of the country, as their economic growth and population growth is generally much slower.

Immigration to Canada since the mid 2010s has been concentrated largely in Ontario and British Columbia, which has forced prices in those provinces to rise much faster than in other provinces. [56] [57]

People displaced from the major cities by high prices have bid up prices in a limited number of popular smaller cities, creating secondary bubbles in those places, but not in smaller cities and towns generally, which are significantly cheaper in proportion to cities than they were a generation before. The numerically few smaller cities which have grown rapidly are those within the commuter belt of major cities (the 905 region of Ontario or the Fraser Valley in British Columbia) as well as those known as retirement communities, such as Sidney, British Columbia and Charlottetown, Prince Edward Island, as well as in resort towns like Whistler or Kelowna.

In January 2021, the Vancouver Sun reported that $500,000 in Killarney Road, New Brunswick (a commuter town near the provincial capital, Fredericton) could buy a five-bedroom, four-bathroom detached home, whereas in Vancouver the same money would only buy a 495-square-foot one-bedroom condo in Vancouver's Kitsilano neighbourhood. [58]

The economic impact of the COVID-19 pandemic in Canada included a rapid increase in prices in already-desirable suburban and exurban areas. Presumably, this is due to people leaving urban condos because they expect to be spending more time at home (either because of remote work or because they do not feel comfortable spending their off-work hours in crowded urban amenities like restaurants and theatres) and want the space to add a home office or a larger backyard for staycations. However, some urban areas have seen strong growth [59] as well, as people simple trade up for more space but still in a city: often a smaller city near their existing family and work connections, notably smaller cities nearby (but outside of) Greater Toronto. According to a report by the agency Re/max, the strongest growth in the main markets (excluding Quebec) during 2020 was in middle-sized Ontario cities, notably: Windsor (+21%), the Muskokas (+20.3%), and Ottawa (+19.4%). The only declines in a major market were seen in former foreign investment hubs West Vancouver (–1%), and North Vancouver (–0.02%), while nearly-flat prices were seen in oil-exposed markets such as Calgary (+0.02%), Edmonton (+1%) and Regina (+2%). [60] Real estate brokerage firm Royal LePage forecasts (July 2021) that housing prices in Canada will rise to $771,500 by the end of the 2021, 16 per cent above the year-end 2020 level. The largest year-over-year gains are forecast for Greater Montreal at 17.5 per cent, followed by Ottawa and Greater Vancouver. [61]

Money laundering

According to Stephen Schneider, criminology professor at St. Mary's University in Halifax, "We've never seen anything like this in Canada and you probably won't see anything like this any time soon." Schneider has also said, "I've never seen such a big operation … that is so geographically confined." His comments were part of the Cullen Commission, which is an ongoing public inquiry into money laundering in British Columbia, led by B.C. Supreme Court Justice Austin Cullen. [62] The Cullen Commission has estimated that in 2019 alone, $5.3 Billion of illicit funds was laundered through the Vancouver real estate market, which increased housing prices by 5%. [62]

Experts refer to "The Vancouver Model" as a way for Chinese organized crime to launder revenue generated primarily by fentanyl sales through casinos. [63]

In 2016, Transparency International Canada found that 33% of the most valuable residential real estate in Vancouver was owned by shell companies and at least 11% have a nominee listed on their title. [64]

Transparency International Canada also studied corporate ownership of Greater Toronto residential real estate and found that between 2008 and 2018, $20 billion of purchases were made using over 50,000 corporations with no checks and balances to determine the beneficial owners or source of funds. [65] Roughly $9.8 Billion (49%) of those purchases were "all cash buys," i.e. no mortgage debt was used for the purchases. In addition, roughly $10 Billion (50%) of the same corporate purchases used mortgages from private unregulated lenders. In contrast, only 11% of households purchase real estate with "all cash" and 3% use private lenders.

Transparency International Canada has highlighted that part of the problem is lack of data. They reported that availability of real estate ownership data varies by province and was hidden behind a paywall. [64]

In 2018, the BC government convened an Expert Panel on Money Laundering in B.C. Real Estate. The resulting report [66] recommended the disclosure of beneficial ownership, among other steps the government could take to address money laundering in the province. In May 2019, the BC government passed an Act [67] which led to the launching of the Land Owner Transparency Registry of BC [68] on November 30, 2020, which opened to public search on April 30, 2021. [69]

Risks

Canada is a nation heavily dependent on the real estate industry which accounts for roughly 14% of its GDP in 2021. [70] There is a high risk that if sentiments begin to change and investors feel the market is about to take a turn for the worse, there will be a mass of people selling their properties, causing prices to drop and potentially snowball. [22] Canadians are increasingly holding large amounts of mortgage related debt, reaching almost $2 trillion dollars of total housing debt in June 2021. [71]

Short-term fixed-rate mortgages are dominant in Canada, [72] typically with the interest rate locked in for five years. This contrasts with the United States, where most homeowners hold long-term fixed-rate mortgage contracts. If the reset rate in five, ten, or fifteen years is higher than in the past, there will be a large risk of default for Canadians with high amounts of debt. Since two-thirds of Canadian mortgages are backed by insurance, a rise in defaults will leave the debts on the hands of the Canadian government and private mortgage insurers. Any drops in home prices could also cause homeowners to owe more on their mortgages than the house is currently valued, which is known as negative equity. [26] [22]

Related Research Articles

This aims to be a complete list of the articles on real estate.

<span class="mw-page-title-main">Real estate economics</span> Application of economic techniques to real estate markets

Real estate economics is the application of economic techniques to real estate markets. It tries to describe, explain, and predict patterns of prices, supply, and demand. The closely related field of housing economics is narrower in scope, concentrating on residential real estate markets, while the research on real estate trends focuses on the business and structural changes affecting the industry. Both draw on partial equilibrium analysis, urban economics, spatial economics, basic and extensive research, surveys, and finance.

<span class="mw-page-title-main">Canada Mortgage and Housing Corporation</span> Canadian national housing agency

Canada Mortgage and Housing Corporation is Canada's federal crown corporation responsible for administering the National Housing Act, with the mandate to improve housing by living conditions in the country.

<span class="mw-page-title-main">Second mortgage</span>

Second mortgages, commonly referred to as junior liens, are loans secured by a property in addition to the primary mortgage. Depending on the time at which the second mortgage is originated, the loan can be structured as either a standalone second mortgage or piggyback second mortgage. Whilst a standalone second mortgage is opened subsequent to the primary loan, those with a piggyback loan structure are originated simultaneously with the primary mortgage. With regard to the method in which funds are withdrawn, second mortgages can be arranged as home equity loans or home equity lines of credit. Home equity loans are granted for the full amount at the time of loan origination in contrast to home equity lines of credit which permit the homeowner access to a predetermined amount which is repaid during the repayment period.

<span class="mw-page-title-main">2000s United States housing bubble</span> Economic bubble

The 2000s United States housing bubble or house price boom or 2000shousing cycle was a sharp run up and subsequent collapse of house asset prices affecting over half of the U.S. states. In many regions a real estate bubble, it was the impetus for the subprime mortgage crisis. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2011. On December 30, 2008, the Case–Shiller home price index reported the largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States.

A housing bubble is one of several types of asset price bubbles which periodically occur in the market. The basic concept of a housing bubble is the same as for other asset bubbles, consisting of two main phases. First there is a period where house prices increase dramatically, driven more and more by speculation. In the second phase, house prices fall dramatically. Housing bubbles tend to be among the asset bubbles with the largest effect on the real economy, because they are credit-fueled, because a large number of households participate and not just investors, and because the wealth effect from housing tends to be larger than for other types of financial assets.

A real-estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets, and it typically follows a land boom. A land boom is a rapid increase in the market price of real property such as housing until they reach unsustainable levels and then declines. This period, during the run-up to the crash, is also known as froth. The questions of whether real estate bubbles can be identified and prevented, and whether they have broader macroeconomic significance, are answered differently by schools of economic thought, as detailed below.

<span class="mw-page-title-main">Spanish property bubble</span>

The Spanish property bubble is the collapsed overshooting part of a long-term price increase of Spanish real estate prices. This long-term price increase has happened in various stages from 1985 up to 2008. The housing bubble can be clearly divided in three periods: 1985–1991, in which the price nearly tripled; 1992–1996, in which the price remained somewhat stable; and 1996–2008, in which prices grew astonishingly again. Coinciding with the financial crisis of 2007–08, prices began to fall. In 2013, Raj Badiani, an economist at IHS Global Insight in London, estimated that the value of residential real estate has dropped more than 30 percent since 2007 and that house prices would fall at least 50 percent from the peak by 2015. Alcidi and Gros note; “If construction were to continue at the still relatively high rate of today, the process of absorption of the bubble would take more than 30 years”.

<span class="mw-page-title-main">Mortgage</span> Loan secured using real estate

A mortgage loan or simply mortgage, in civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any purpose while putting a lien on the property being mortgaged. The loan is "secured" on the borrower's property through a process known as mortgage origination. This means that a legal mechanism is put into place which allows the lender to take possession and sell the secured property to pay off the loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms. The word mortgage is derived from a Law French term used in Britain in the Middle Ages meaning "death pledge" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. A mortgage can also be described as "a borrower giving consideration in the form of a collateral for a benefit (loan)".

<span class="mw-page-title-main">Subprime mortgage crisis</span> 2007 mortgage crisis in the United States

The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions of people losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).

United States housing prices experienced a major market correction after the housing bubble that peaked in early 2006. Prices of real estate then adjusted downwards in late 2006, causing a loss of market liquidity and subprime defaults.

<span class="mw-page-title-main">Causes of the 2000s United States housing bubble</span>

Observers and analysts have attributed the reasons for the 2001–2006 housing bubble and its 2007–10 collapse in the United States to "everyone from home buyers to Wall Street, mortgage brokers to Alan Greenspan". Other factors that are named include "Mortgage underwriters, investment banks, rating agencies, and investors", "low mortgage interest rates, low short-term interest rates, relaxed standards for mortgage loans, and irrational exuberance" Politicians in both the Democratic and Republican political parties have been cited for "pushing to keep derivatives unregulated" and "with rare exceptions" giving Fannie Mae and Freddie Mac "unwavering support".

<span class="mw-page-title-main">South East Asian and Hong Kong property markets</span>

Ever since the 1997 Asian financial crisis, property markets have greatly developed through the years. Asian governments have improved the financial stance associated with the structure of housing finance, allowing more access to a diverse range of mortgages products.

<span class="mw-page-title-main">Australian property bubble</span>

The Australian property bubble is the economic theory that the Australian property market has become or is becoming significantly overpriced and due for a significant downturn. Since the early 2010s, various commentators, including one Treasury official, have claimed the Australian property market is in a significant bubble.

<span class="mw-page-title-main">Chinese property bubble (2005–2011)</span>

The 2005 Chinese property bubble was a real estate bubble in residential and commercial real estate in China. The New York Times reported that the bubble started to deflate in 2011, while observing increased complaints that members of the middle-class were unable to afford homes in large cities. The deflation of the property bubble is seen as one of the primary causes for China's declining economic growth in 2013.

Real estate in China is developed and managed by public, private, and state-owned red chip enterprises.

<span class="mw-page-title-main">Affordable housing in Canada</span>

Affordable housing in Canada is living spaces that are deemed financially accessible to those with a median household income in Canada. The property ladder continuum of affordable housing in Canada includes market, non-market, and government-subsidized housing.

The property bubble in New Zealand is a major national economic and social issue. Since the early 1990s, house prices in New Zealand have risen considerably faster than incomes, putting increasing pressure on public housing providers as fewer households have access to housing on the private market. The property bubble has produced significant impacts on inequality in New Zealand, which now has one of the highest homelessness rate in the OECD and a record-high waiting list for public housing. Government policies have attempted to address the crisis since 2013, but have produced limited impacts to reduce prices or increase the supply of affordable housing. However, prices started falling in 2022 in response to tightening of mortgage availability and supply increasing. Some areas saw drops as high as around 9% - albeit from very high prices.

The Chinese mortgage boycott is an ongoing mass protest in the People's Republic of China primarily in response to delayed and substandard property development from China Evergrande Group, the second-largest property development firm in China by market capitalization alongside other property development corporations.

<i>Better Dwelling</i> Vancouver based financial media company.

Better Dwelling is a Vancouver-based daily news publisher and financial media company. It operates Canada's largest independent housing news outlet.

References

  1. ↑ "International House Price Database, Third Quarter 2022 Data". www.dallasfed.org. Retrieved September 3, 2023.
  2. 1 2 Haber, Bob. "Canadian Real Estate Bubble Blowing Up North." Forbes, Forbes Magazine, April 3, 2018, www.forbes.com/sites/bobhaber/2018/04/02/canadian-real-estate-bubble-blowing-up-north/#1b74d3871d5e.
  3. ↑ Economic and Development Review Committee (EDRC) of the OECD (June 2016). "2016 Economic Survey of Canada" (PDF). OECD.org. Retrieved September 25, 2023.
  4. ↑ Tencer, Daniel (October 3, 2018). Canada At Risk As 'First Cracks' Appear In Global Housing Bubbles: UBS., HuffPost (Canada edition)
  5. ↑ "So Where Is the Next House Price Bubble Brewing?". Bloomberg.com. July 30, 2019. Archived from the original on December 14, 2019. Retrieved June 25, 2021.
  6. ↑ "World's Bubbliest Housing Markets Flash 2008 Style Warnings". Bloomberg.com. June 15, 2021. Archived from the original on June 15, 2021. Retrieved June 25, 2021.
  7. ↑ "UBS Global Real Estate Bubble Index 2022". Insights. Retrieved September 3, 2023.
  8. ↑ "BIS Statistics Explorer: Table F1.1". stats.bis.org. Retrieved September 3, 2023.
  9. ↑ "Household debt, loans and debt securities. Percent of GDP". International Monetary Fund. Retrieved September 3, 2023.
  10. ↑ "BIS Statistics Explorer: Table F1.1". stats.bis.org. Retrieved September 3, 2023.
  11. ↑ Cashin, Paul; McDermott, C. John; Scott, Alasdair (November 1999). Wickham, Peter (ed.). "Booms and Slumps in World Commodity Prices" (PDF). International Monetary Fund external publications. Retrieved September 3, 2023.
  12. ↑ Toronto Regional Real Estate Board (2023). "Historic Statistics" (PDF).
  13. 1 2 3 Macdonald, David (August 2010). "Canada's Housing Bubble : An Accident Waiting to Happen" (PDF). Canadian Centre for Policy Alternatives.
  14. ↑ Based on the median after-tax income of total under 65 economic families. Statistics Canada Custom Tabulation: Survey of Income and Labour Dynamics as per MacDonald, Canada's Housing Bubble, Aug 2010
  15. ↑ "Adjusting to the Fall in Commodity Prices: One Step at a Time". www.bankofcanada.ca. Retrieved September 11, 2023.
  16. ↑ "The Long-Term Evolution of House Prices: An International Perspective". www.bankofcanada.ca. Retrieved September 11, 2023.
  17. ↑ Comparing CREA number of sales for residential real estate in greater Vancouver (GVA), Calgary, Edmonton, greater Toronto (GTA), Ottawa and Montreal to the number of Canadian sales for residential real estate in 2010 as reported in MacDonald "Canada's Housing Bubble" Aug 2010
  18. ↑ Government of Canada, Statistics Canada (April 13, 2021). "Residency participation of residential properties, by property type and period of construction". www150.statcan.gc.ca. Retrieved September 12, 2023.
  19. ↑ "Western News - Expert insight: Canada's ban on foreign homebuyers is unlikely to affect housing affordability". Western News. January 13, 2023. Retrieved September 12, 2023.
  20. ↑ Branch, Legislative Services (January 1, 2023). "Consolidated federal laws of Canada, Prohibition on the Purchase of Residential Property by Non-Canadians Act". laws-lois.justice.gc.ca. Retrieved September 12, 2023.
  21. ↑ "Speculation by Canadians 'absolutely' playing a role in red-hot home prices: expert - National | Globalnews.ca". Global News. Retrieved April 27, 2022.
  22. 1 2 3 4 5 Castaldo, Joe. "How Canada's Real Estate Market Went Completely Insane." Canadian Business - Your Source For Business News, July 10, 2017, www.canadianbusiness.com/economy/how-canadas-real-estate-market-went-completely-insane/.
  23. ↑ Austen, Ian (April 20, 2017). "Ontario Hopes Tax on Non-Canadians Buying Toronto Homes Will Temper Prices". The New York Times. ISSN   0362-4331 . Retrieved September 26, 2023.
  24. ↑ Premier, Office of the (July 25, 2016). "Action on foreign investment, consumer protection and vacancy puts British Columbians first | BC Gov News". news.gov.bc.ca. Retrieved September 26, 2023.
  25. ↑ Marr, Garry (April 20, 2017). "Ontario slaps 15% tax on foreign buyers, expands rent control in 16-point plan to cool housing". financialpost.com. Retrieved September 25, 2023.
  26. 1 2 3 Andrews, Jeff. "Canada's Housing Bubble Is Starting to Burst." Curbed, Curbed, March 7, 2018, www.curbed.com/2018/3/7/17085794/canada-housing-market-collapse.
  27. ↑ Tencer, Daniel. "Canada At Risk As 'First Cracks' Appear In Global Housing Bubbles: UBS." HuffPost Canada, HuffPost Canada, October 3, 2018, www.huffingtonpost.ca/2018/09/29/toronto-vancouver-have-world-s-3rd-and-4th-largest-housing-bubbles-ubs_a_23544956/.
  28. ↑ "Ontario's Fair Housing Plan." News.ontario.ca, news.ontario.ca/mof/en/2017/04/ontarios-fair-housing-plan.html.
  29. ↑ "Canada's Housing Market Still 'Highly Vulnerable' despite Easing Prices, CMHC Warns." Financial Post, October 25, 2018, business.financialpost.com/real-estate/prices-easing-but-canadas-housing-market-still-highly-vulnerable-cmhc.
  30. ↑ Alini, Erica. "Will It Crash? Here's What to Expect from the Canadian Housing Market in 2019." Global News, Global News, December 2, 2018, globalnews.ca/news/4688308/canada-housing-market-outlook-2019/.
  31. 1 2 Khan, Mikael; Webley, Taylor (April 2019). "Disentangling the Factors Driving Housing Resales" (PDF). Bank of Canada. p. 8. Retrieved May 13, 2019.
  32. 1 2 "Investors account for a fifth of home purchases in Canada. Are they driving up housing prices in a booming market?" . Retrieved June 23, 2021.
  33. ↑ "Toronto condo, apartment rental prices drop again amid ongoing coronavirus pandemic". Global News.
  34. ↑ "Canada Tried To Stop Real Estate Prices From Falling, And Created A Bigger Bubble". Better Dwelling. March 5, 2021.
  35. ↑ "Canada's mortgage 'stress test' level falls for 3rd time since pandemic began". CBC. August 13, 2020.
  36. ↑ McNutt, Lydia (August 18, 2021). "Greater Toronto Real Estate Market Report (2021)". RE/MAX Canada. Retrieved March 15, 2024.
  37. ↑ "CMHC Warns Canadians: "Support For Homeownership Cannot Be Unlimited"". Better Dwelling. May 20, 2020.
  38. ↑ Evans, Pete (January 17, 2022). "House Price Index rose 26% in 2021, fastest pace on record". cbc.ca. Retrieved March 15, 2024.
  39. ↑ "Bank of Canada Governor Tiff Macklem sees "some signs of excess exuberance"" – via www.youtube.com.
  40. ↑ "BOC Governor Says Canada Will Lean On Real Estate Because "We Need The Growth"". Better Dwelling. February 25, 2021.
  41. ↑ "Bank of Canada Wants A Housing Bubble, While Other Central Banks Try To Pop Them". Better Dwelling. March 9, 2021.
  42. ↑ "Bank of Canada governor strongly hints that benchmark rate will stay for now". Radio Canada International. February 24, 2021.
  43. ↑ Smith, Fergal (March 8, 2021). "Bank of Canada Seen Resisting Investor Expectations of Early Rate Hike". U.S. News & World Report . Archived from the original on June 1, 2022.
  44. ↑ Smith, Fergal (June 20, 2021). "Bank of Canada to break sequence of lower terminal rates as governments splurge". CTVNews. Retrieved June 25, 2021.
  45. ↑ "Best communities in Canada: Why Atlantic Canada comes out on top". April 8, 2021.
  46. ↑ "Rising interest rates will be 'No. 1 issue' for Canada's housing market, economists say". Global News. Retrieved June 25, 2021.
  47. ↑ Ghazi, Saarah (August 9, 2023). "BNN Bloomberg: Canada's real estate correction is far from over". Oxford Economics. Retrieved September 3, 2023.
  48. ↑ Hogue, Robert (March 29, 2023). "Brighter days ahead as home ownership costs go through the roof". RBC Thought Leadership. Retrieved September 3, 2023.
  49. ↑ Armstrong, Peter (September 16, 2022). "Canadian households have lost billions in real estate cool-down". cbc.ca. Retrieved March 15, 2024.
  50. ↑ "2 years in, has the Bank of Canada's historic rate hike campaign done the job? - National | Globalnews.ca". Global News. Retrieved March 16, 2024.
  51. ↑ Pasalis, John. "September 2022 Market Update: Toronto Home Prices Level Off Due to Low Inventory". www.movesmartly.com. Retrieved March 16, 2024.
  52. ↑ "Canada Housing Market Crash | Fast-rising Borrowing Costs Predicted to Deepen Slump".
  53. ↑ Hogue, Robert (February 15, 2023). "Home prices still dropping across Canada". RBC Thought Leadership. Retrieved February 22, 2023.
  54. 1 2 "Housing market has gone into 'hibernation' CREA says, with lower sales, listings and flat prices".
  55. ↑ "Canada is banning some foreigners from buying property after home prices surged | CNN Business". January 2023.
  56. 1 2 "How immigration and an aging population will affect Canada's housing market". financialpost. Retrieved February 22, 2023.
  57. 1 2 Barcelo, Yan. "Canadians: Don't Rush To Buy a House". Morningstar CA. Retrieved February 22, 2023.
  58. ↑ "What $500,000 buys in today's Canadian real estate market". vancouversun. Retrieved July 18, 2021.
  59. ↑ "Liberals need a plan to tackle housing - or they risk alienating young Canadians". Newsrooms. May 25, 2021. Retrieved May 25, 2021.
  60. ↑ McNutt, Lydia (December 1, 2020). "Canadian Housing Market Outlook (2021)".
  61. ↑ "Vancouver housing prices stay hot even as market cools: Royal LePage report". vancouversun. Retrieved July 18, 2021.
  62. 1 2 "Cullen Commission". cullencommission.ca. Retrieved December 20, 2020.
  63. ↑ "Vancouver model for money laundering unprecedented in Canada, B.C. inquiry hears". CBC. Retrieved December 20, 2020.
  64. 1 2 "Canadian Real Estate Still Opaque, But Light is Creeping In". Transparency International Canada. December 18, 2020. Retrieved December 20, 2020.
  65. ↑ "Billions In Toronto Real Estate Bought Anonymously, With Funds of Unknown Origin". Better Dwelling. March 21, 2019. Retrieved December 20, 2020.
  66. ↑ Combatting Money Laundering in B.C. Real Estate report
  67. ↑ Land Owner Transparency Act
  68. ↑ Land Owner Transparency Registry of BC
  69. ↑ Finance, Ministry of. "Land Owner Transparency Registry - Province of British Columbia". www2.gov.bc.ca. Retrieved September 7, 2023.
  70. ↑ Carmichael, Kevin (February 1, 2021). "While the world is in the midst of a tech revolution, Canadians bet on real estate". Financial Post. Retrieved April 27, 2022.
  71. ↑ Evans, Pete (June 18, 2021). "Canadian mortgage debt grew by $18 billion in April, biggest monthly gain ever, StatsCan says". CBC News. Archived from the original on June 18, 2021.
  72. ↑ Kartashova, Katya; Zhou, Xiaoqing. "How Do Mortgage Rate Resets Affect Consumer Spending and Debt Repayment? Evidence from Canadian Consumers" (PDF). Bank of Canada. Retrieved July 18, 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.