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More amazing market numbers

Another report and another round of startling numbers from Canada’s housing market. The Canadian Real Estate Association is reporting its best September ever.  Sales rose nearly 46% compared to a year ago.  That is 20,000 units more than the previous September record. The average price for a home in Canada hit an ominous, record high as well, at $604,000 – a 17% increase y-o-y.  Toronto and Vancouver continue to have a heavy influence on the average price.  With those two markets factored out, the national average drops to $479,000, which is a 20% increase from a year ago. CREA’s Aggregate Composite Home Price Index – which is seen as a truer measure of home prices – showed a 10% increase y-

Caution and patience as we look ahead

The latest employment numbers coupled with the September reports from the Toronto and Vancouver real estate boards have triggered a lot of optimism about Canada’s economic recovery and the state of the housing market. Statistics Canada reports the economy added 378,000 jobs in September, and the unemployment rate dropped to 9%.  Toronto realtors posted a record breaking 11,083 sales last month, up 42% from a year earlier.  The benchmark price rose 14%, y-o-y.  Vancouver had its best September ever: 3,643 sales, up more than 56% y-o-y.  The benchmark price rose nearly 6%. All of these numbers continue to defy expectations and so caution and patience need to be the guiding principles as we try

TD Economics | Labour Market Recovery Speeds Up in September

Employment rose 378k in September, marking the fifth straight month of increases. This means 76% of jobs lost during the lockdowns (March and April) have been recouped thus far. Compared to employment, the labour force increase was more modest, rising 164k in September. As a result, the unemployment rate took a big step downwards to 9.0% from 10.2% in August. Hours worked continued to improve last month, increasing 1.9% m/m. More Canadians saw hours return closer to normal as those who were working less than half their usual hours for reasons likely related to COVID-19 fell by 108k. Still, the number of people absent from work due to COVID-19 elevated at 605k. The labour utilization rate fel

Macklem puts 'dangerously over-leveraged' Canadians on notice

The governor of the Bank of Canada said managing the financial risk from the COVID-19 pandemic is more critical than ever, while the central bank is paying close attention to the housing market amid an historically low interest rate environment. “We will also watch for signs that housing markets are being driven higher by speculation that prices will keep rising,” Tiff Macklem said in a speech Thursday. “And we will watch whether people buying houses are taking on outsized debt relative to their income.” “But if too many Canadian households start to become dangerously over-leveraged, policy-makers have several macroprudential tools they can use. Our experience with the mortgage-interest stre

UBS: Toronto’s Bubble Risk Increases, While Vancouver Is Now Just “Overvalued”

One of the world’s largest banks is seeing real estate bubbles across the world. UBS analysts published their 2020 Bubble Index, noting this many markets haven’t increased at once since 2006. In Canada, Toronto lost it’s spot as the world’s second biggest bubble to Frankfurt. Despite slipping in rank, the bank is noting fundamentals continue to get worse. Meanwhile, Vancouver real estate is no longer in bubble territory after a price drop, and is now just “overvalued.” Global Real Estate Markets All Look The Same UBS is seeing real estate prices rise across the world, regardless of fundamentals. The last time fewer cities with negative price growth appeared was 2006. Analysts at the big Swis

What is Mortgage Refinancing?

Life happens. Whether you are facing financial emergency, wanting to improve your financial situation, put more into your investment portfolio, mortgage refinancing can be the answer – when done properly! What is Mortgage Refinancing? First, let’s start with what is mortgage refinancing? Refinancing your mortgage refers to the process of renegotiating your current mortgage agreement for a variety of reasons. Essentially, refinancing allows you to pay off your existing mortgage and replace it with a new one. There are a variety of reasons to consider mortgage refinancing, including but not limited to: ●      You want to leverage large increases in property value ●      You want to get equity

Optimism strong in a weakening economy

Canada’s uncertain economy has not dampened home ownership optimism among millennials and the young, first-time buyer cohort. In fact, the current coronavirus disruption is seen as a driver of the desire for home ownership among the 18 to 34 year-old demographic. A recent survey by one of the big banks suggests the pandemic and its restrictions have nearly 20% of 18 to 34 year-olds accelerating their plans to purchase a home or investment property.  The thinking is, rules which have confined people to their homes have sparked a realization that they need a bigger, more functional living space. Historically low interest rates continue to have an outsized influence on homebuying optimism.  The

Housing market stable, but prices in question

After six months in COVID quarantine Canada Mortgage and Housing Corporation is, once again, releasing its quarterly Housing Market Assessments. The most recent HMA covers up to the end of June so the very busy period through July and August does not figure into the report. Overall, the federal housing agency ranks the vulnerabilities to Canada’s housing market as moderate, the same as its last report in February.  Overvaluation continues to show moderate risk while the other three factors – overheating, price acceleration and overbuilding – are ranked as low risk.   No individual markets remain in the high risk category. CMHC cites “the evidence of rising imbalances in some local housing ma

Canadian Real Estate Buyers Trying To Walk Away From Purchases Become “Rampant”

Canadian real estate buyers are starting to ghost sellers, after making offers. Marvin Alexander, president of Keller Williams Realty Centres, a Greater Toronto-based brokerage, notes an unusual uptick of buyers not delivering deposit cheques. He’s not alone. The broker is hearing similar stories from other brokerages across Greater Toronto, and suspects it might be a Canada-wide trend. Toronto Real Estate Buyers Ghosting Sellers Greater Toronto real estate buyers are placing offers on homes, then failing to close. Once a buyer places an offer, they are typically obligated to follow through with the buy. This usually means dropping off the “deposit cheque,” a few days after its been accepted

The Real Estate Board of Greater Vancouver - September 2020 Stats

Home sale and new listing activity reached record levels in Metro Vancouver* in September. The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,643 in September 2020, a 56.2 per cent increase from the 2,333 sales recorded in September 2019, and a 19.6 per cent increase from the 3,047 homes sold in August 2020. Last month’s sales were 44.8 per cent above the 10-year September sales average and is the highest total on record for the month. "We've seen robust home sale and listing activity across Metro Vancouver throughout the summer months. This increased activity can be attributed, in part, to lower interest rates and changing housing

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