TD Bank is warning Canadians that there is a very real risk of a housing bubble in several parts of the country. Some cities have properties so overvalued that it is a major concern. Vancouver is on the top of that red flag list. The firm believes that there might be a housing correction of as much as ten to fifteen percent. Vancouver’s high prices are partly the result of a number of foreign buyers investing in the area, particularly from China and other parts of Asia.
Residents in Vancouver have a lot to think about when deciding whether to rent or buy property. On one hand, property in the area continues to go up. It is already expensive, but it will be more so in the future. Getting in now while interest rates are low might prove an investment for the future. Getting in now may also mean you have a chance of getting in at all.
The Bank of Canada may end up tackling the nation’s mortgage debt on its own. That is, if the nation’s banks don’t make any headway on the issue. The entity was hinting that it could raise interest rates as early as this coming summer. Not necessarily a comforting thought.
February home sales in Greater Vancouver were up over 60 percent over January of 2012. Even so, these sales were down almost 18 percent from February of 2011 when the real estate market was exceedingly hot. The Real Estate Board of Greater Vancouver considers the market to be essentially balanced, news that is welcome coming into the spring sale season.
The Teranet National Bank released its house price index this past Wednesday. The report noted that during the last quarter of 2011, housing prices across Canada were either flat or falling slightly. In December of 2011, housing prices fell 0.2 percent from the month before. It was the second month in a row to see a decrease. September and October of 2011 saw the prices remain flat.
A report released this past Monday from the Canada Mortgage and Housing Corporation, or CMHC for short, predicts that Canada’s real estate housing market can look forward to at least a couple more years of stability. Activity for 2012 is expected to be at roughly the same levels as 2011 as far as sales and housing starts, so predicts Mathieu Laberge, who is a CMHC deputy chief economist.
Condo owners in British Columbia will soon be facing the same rule changes already implemented in Alberta and Ontario. These concern disclosure requirements, which are much more stringent. Owners must now file a depreciation report on their properties once every three years. It is not sure how this will affect both short and long term condo investors.
A new MLS tool will be introduced into five of the largest Canadian housing markets; Vancouver, the Fraser Valley, Calgary, Montreal and Toronto. By the end of 2013, some 16 more major metropolises will be on board. This new tool will keep high end sales from influencing the CREA’s monthly sales figures, and stifle critics of the current system.
