So if there’s a housing bubble in Canada who is to blame? Some people blame foreign buyers, some people blame local buyers. Some people think sellers are to blame and some people think the government is to blame. From the National Post:
Many analysts are becoming increasingly concerned that some cities — notably Toronto, Vancouver and possibly Calgary — are in the midst of their own U.S.-style housing bubble. A document written by the country’s financial regulator and obtained earlier this year through an access to information request, expresses concern over the “emerging risk” of Canadian loans that “have some similarities to non-prime loans in the U.S. retail lending market.” Bank of Canada Governor Mark Carney continued tosound the alarm as well last week over the growing level of household debt, while maintaining the overnight lending rate at a near-record low level of 1%.
The question remains as to why prices in Toronto and Vancouver — where the economy is stagnant — are rising so fast, and not in cities like Edmonton and Saskatoon — where the economy, and population, is booming.
Read the rest of the article here.
It’s Friday! Take off your pants and do the happy dance!
Agh! No, wait! Metaphorically. Please sir, put your pants back on, this is a family restaurant.
Anyways, it IS the end of the week and do you know what that means? It’s time for another end-of-the-week news round-up and open topic discussion thread. A little thing we like to refer to as the Friday Free-for-all! Here are a few recent links to kick off the chat:
–Canada prices up, Vancouver falls again
–Inventory graph (March 29th 2012)
–The boomer trigger
–New budget slashes $5.2 billion
–Ottawa to toughen CMHC oversight
–This rant brought to you by Gordholio
–TD: don’t worry about the banks
–Banks tighten condo lending on bubble fears
–The 3-inch condo is here
–Vancouver seeks more market housing
–Storm clouds form over Vancouver market
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
Over at the The Star, our mayor has helped to write an opinion piece asking that the CMHC provide more loans for rental housing construction:
For most of us, housing is our biggest expense. One out of every five dollars we earn goes to build, buy, rent and run our homes. Facing high home prices, large personal debts, and an uncertain economy, fewer Canadians can buy a new home today than in the past, and they are choosing to rent instead.
Unfortunately, in many cities finding an affordable place to rent is nearly impossible. The most immediate problem is supply. Vacancy rates under 3 per cent push rents up. In Vancouver and the Greater Toronto Area, it’s 1.4 per cent.
Vacancy rates this low force our young people to move out of the city, threaten seniors on fixed incomes, and have a negative impact on local businesses.
That’s why this spring’s federal budget must put Canada’s rental housing market on solid ground, by pursuing low-cost, high-leverage policies that get jobs on the ground and build housing Canadians can afford.
It’s like magic, creating jobs and homes. What could go wrong with a ‘low-cost, high-leverage’ policy like that?