The Canadian Mortgage and Housing Corporation keeps on giving the national real estate market it’s worst possible rating. You can probably guess which cities get singled out as the most at risk:
CMHC’s valuation is part of its quarterly Housing Market Assessment, something the Crown corporation calls an early warning system, alerting Canadians to areas of concern developing in housing markets so that they may take action in a way that promotes market stability.
In terms of the 15 individual markets studied, CMHC said it saw strong evidence of overall problematic conditions in Victoria, Vancouver, Saskatoon, Hamilton and Toronto – the same five markets singled out a quarter ago.
CMHC defines problematic conditions as imbalances in the housing market that occur when overbuilding, overvaluation, overheating and price acceleration, or combinations of those issues exceed historical norms.
Read the full article here.
New government, new housing mandate.
In your role as Minister of Municipal Affairs and Housing I expect that you will make substantive progress on the following priorities:
- Partner with local governments and First Nations to develop a community capital infrastructure fund to upgrade and build sports facilities, playgrounds, local community centres, and arts and culture spaces.
- Through partnerships with local governments, the federal govenrment, and the private and not-for- profit sectors, begin to build 114,000 units of affordable market rental, non-profit,
co-op, supported social housing and owner-purchase housing.
- Create new student housing by removing unnecessary rules that prevent universities and colleges from building affordable student housing.
- Amend the Residential Tenancy Act to provide stronger protections for renters, and provide additional resources to the Residential Tenancy Branch.
- With the Minister of Finance, deliver an annual renter’s rebate of $400 dollars per rental household to improve rental affordability.
- Work in partnership to develop a homelessness action plan to reduce the homeless population through permanent housing and services. As part of the plan, conduct a province-wide homelessness count.
- Work with the Minister of Finance to address speculation, tax fraud and money laundering in the housing market.
- As the Minister responsible for TransLink, support the Mayors’ Council 10-Year Vision for Metro Vancouver Transportation by funding 40%of the capital costs of every phase of the plan, in partnership with all levels of government.
We suspect many people reading here are disappointed that Eby isn’t the housing minister and are curious to see how that second to last point turns out. You can read the full letter here.
In Canada ‘middle class’ currently seems to mean ‘deep in debt’ and rate hikes are a looming threat on the middle class :
For one view of Canada’s rate hike, consider the case of David and Neera. He can’t get a raise, is worried about retirement and they borrowed money a couple years ago to fix the roof. Interest costs will jump now, with vacations and kids’ clothes already out of reach.
Justin Trudeau’s entire economic agenda is aimed at David and Neera — we know, because he invented them. Their story anchored the Liberal government’s debut budget, tying together the impact of all the prime minister’s measures. Now they’re a cautionary tale.
“Canadian families are also taking on more debt to make ends meet,” the 2016 budget said. “For David and Neera, this debt is a constant source of worry.”
Read the full article over that the Financial Post.
Poloz is hinting that rate hikes are coming and thats pushing the Canadian dollar up a bit:
The Canadian dollar climbed to a four-month high of 76.44 cents US after Poloz’s comments, which fed speculation about a rate increase as early as its next scheduled announcement in two weeks. The boost lifted the loonie from an average price of 75.83 cents US on Tuesday.
If the central bank increases its key rate, the big Canadian banks are expected to raise their prime rates, driving up the cost of variable rate mortgages, other loans and lines of credit tied to the benchmark rate.
Poloz credited the two rate cuts introduced by the bank in 2015 for helping the economy counteract the effects of the oil-price slump, which began in late 2014. The reductions also helped increase the speed of the adjustment, Poloz added.
“It does look as though those cuts have done their job,” said Poloz, who was in Portugal on Wednesday to participate in a forum hosted by the European Central Bank.
“But we’re just approaching a new interest rate decision so I don’t want to prejudge. But certainly we need to be at least considering that whole situation now that the capacity, excess capacity, is being used up steadily.”
Read the full article over at the Financial Post.
Here’s a surprise – it turns out if you hand out $13 Million in loans to the general population to buy a product, the price of that product rises.
In this case the product is condos and the $13M comes courtesy of taxpayers and the BC liberal governments ‘BC Home Owner Mortgage and Equity Partnership’ program.
As it turns out though, not everyone things this is the smartest thing in the world. UBC economist Tom Davidoff sounds downright unenthusiastic:
The BC Liberals announced the program back in December, arguing it would help young families crack into the red-hot housing market.
But critics warned that financially stretched buyers would take on risk by essentially starting a second mortgage and that the infusion of cash could drive prices up.
Davidoff said that second case appears to be playing out, with people using the program now accounting for about five to 10 per cent of condo purchases.
“When there’s too many people chasing too few houses, pushing more people to get in on the action just seems like a really dumb idea.”
Condo sales have been driving the Metro Vancouver real estate market in recent months, and the average unit price now sits at about $655,000.
For the month of May, the Real Estate Board of Greater Vancouver found 95 per cent of all condos listed had sold, with prices up more than 17 per cent year over year.
Read the full article over at global news.