Demographics Bolster Canada’s Housing Market | Chappaqua NY Real Estate
An increasing number of economists, politicians and pundits have been sounding the alarm over Canada’s housing market. And while Canada’s financial system has a reputation for conservatism, we’ve been wondering ourselves how a nation of just 35 million can sustain an average home price of nearly CAD392,000 amid anemic economic growth.
Of course, homeowners have enjoyed an era of historically low interest rates, which has helped make higher prices more affordable, even if Finance Minister Jim Flaherty has tightened mortgage-lending regulations four times over the past several years.
Flaherty’s last change was in July 2012, when he shortened the amortization period on government-backed mortgages to 25 years from 30 years, while lowering the maximum amount homeowners can borrow against their homes to 80 percent from 85 percent. And he’s prepared to intervene again, if necessary.
Meanwhile, according to data from the Canadian Real Estate Association, the rise in residential real estate prices doesn’t even come close to the double-digit gains characteristic of the US housing market during its bubble earlier last decade. Indeed, as of October, home prices have climbed 8.5 percent over the past year and are up about 29 percent since early 2008.
As many observers note, a substantial portion of the increase in Canada’s average home price is derived from the overheated real estate markets in Toronto and Vancouver. Indeed, the average price for a single-family home in each of these metro areas is simply staggering, at more than CAD804,000 in Toronto and almost CAD923,000 in Vancouver.
http://www.investingdaily.com/18847/demographics-bolster-canadas-housing-market/
Of course, homeowners have enjoyed an era of historically low interest rates, which has helped make higher prices more affordable, even if Finance Minister Jim Flaherty has tightened mortgage-lending regulations four times over the past several years.
Flaherty’s last change was in July 2012, when he shortened the amortization period on government-backed mortgages to 25 years from 30 years, while lowering the maximum amount homeowners can borrow against their homes to 80 percent from 85 percent. And he’s prepared to intervene again, if necessary.
Meanwhile, according to data from the Canadian Real Estate Association, the rise in residential real estate prices doesn’t even come close to the double-digit gains characteristic of the US housing market during its bubble earlier last decade. Indeed, as of October, home prices have climbed 8.5 percent over the past year and are up about 29 percent since early 2008.
As many observers note, a substantial portion of the increase in Canada’s average home price is derived from the overheated real estate markets in Toronto and Vancouver. Indeed, the average price for a single-family home in each of these metro areas is simply staggering, at more than CAD804,000 in Toronto and almost CAD923,000 in Vancouver.
http://www.investingdaily.com/18847/demographics-bolster-canadas-housing-market/
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