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The Worst Kept Secret Is Uut: Canada’s Housing Market Is the Most Undersupplied in the G7

The Worst Kept Secret Is Out: Canada’s Housing Market Is the Most Undersupplied in the G7

While it does not take a market expert to know that we have a supply problem, the quantum and dire shortage compared to our G7 colleagues might.

Scotiabank’s Chief Economist Jean-Francois Perrault has been a pioneer in analyzing G7 housing data and his findings are alarming.

The supply of Canadian housing simply has not kept up with population growth pointing to a near-record imbalance between the supply of housing and demand.

Despite the COVID-19 induced stagnation in population growth in 2020 it is set to get EVEN WORSE as normalcy returns with the increased Immigration Plan of 1.2MM new people coming to this country over the next 3 years.

Canada has 424 housing units per 1000 residents – well below the G7 average of 471 – to make good on the shortfall and catch up with the G7 average would mean building a massive 1.8MM new homes.

Scotiabank is not advocating the unrealistic waving of a magic wand with millions of new homes being built immediately. They are making a realistic and commercially viable plea for vested parties to come together to solve a national and political hot potato – the housing supply crisis.

“We propose the urgent creation of a national table composed of federal, provincial and municipal authorities, along with real-estate developers, investors and civil society organizations to comprehensively identify and tackle the obstacles to more responsive supply in all segments of the housing market”

In GTA the imbalance is the worst in the country by a wide margin – well below the national average which is significantly worst than the G7 shortfall.

For the immediate future, the GTA is a housing supply disaster.

A short-term solution is unrealistic and pricing to make an equilibrium of strong demand and a depleted supply are expected to chase prices higher in the short to mid-term.

New Zealand, a country of only 5MM people has an even more insoluble supply crisis and nose-bleed price housing price increases. Its government has recently become the first industrialized country to instruct the independent Reserve Bank of New Zealand (RBNZ) to consider housing prices in making Monetary Policy.

The next release of Monetary Policy Statements (MPS) from RBNZ will be keenly watched around the globe and could be an influential arbiter for a Canadian housing supply crisis solution.

*Please note that this article only reflects the views of the author, and does not represent the stance of the company.

*The information provided here is for general information purpose only, which does not necessarily reflect the views or opinions of Bay Street Group. We assume no responsibility for its accuracy, completeness, or sufficiency.
*As for intellectual property rights of others, anyone who believes that their work has been reproduced in a way that constitutes copyright infringement may contact us.

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CMHC Predict a 14% Climb in Canadian Home Prices Over The Next 12 Months

CMHC Predict a 14% Climb in Canadian Home Prices Over The Next 12 Months

In a sharp contrast to last Springs’  prediction of an 18% annual decline in housing prices, CMHC is now marching in tandem with the general consensus in the market forecasting world – as outlined in their CMHC Housing Market Outlook – Spring 2021.
They now see Canadian home prices could climb over 14% in the pandemic’s second year as the combination of low-interest rates, an insoluble supply shortage, the government’s unwillingness to rock the boat and a significant increase in immigration all combine in tandem with the recovery of the economy.
 
This confluence of events is expected to remain in place and reinforce strong house price growth throughout 2021 bringing more modest, single price growth expected in 2022 and 2023.
 
Toronto Real Estate Board (TREB) recently released its sales figures for April which showed a modest decline in activity compared to March’s numbers – no surprise given the unprecedented high level of sales over the last 12 months.
Putting the numbers in context – the 13,663 transactions for April is still 36.6% higher than the GTA’s 10 year average for April.
 
Jason Mercer, TREB’s Chief Market Analyst remains cautiously bullish and optimistic.
“Home prices will likely continue an upward trend. Revised population growth over the next year with a persistent lack of new inventory will underpin home price appreciation”
 
The momentum in housing price growth appears set to continue for the foreseeable future.
 
 

*Please note that this article only reflects the views of the author, and does not represent the stance of the company.

*The information provided here is for general information purpose only, which does not necessarily reflect the views or opinions of Bay Street Group. We assume no responsibility for its accuracy, completeness, or sufficiency.
*As for intellectual property rights of others, anyone who believes that their work has been reproduced in a way that constitutes copyright infringement may contact us.

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The Trouble with Using the Word “Bubble” in Real Estate

The Trouble with Using the Word “Bubble” in Real Estate

In March 2020 at the outset of COVID-19, Canada Mortgage and Housing Corporation (CMHC) issued a warning that the average house in Canada could see a decline of up to 18%.

Fast forward a year later – the average price of a home in Canada rose to $716,828 – an astonishing year over year rise of 32%.
Toronto’s average home price rose to over a million dollars and also saw year over year growth of 16.5% – still regarded as very robust.
 
Sometimes forecasting makes a mockery of the best of intentions.
 
During  the same period the price-to-income ratio rose to a 40 year high. This well known rule-of-thumb valuation matrix suggests that the average price in your city should not exceed 4X the average income – any higher and its starting to get expensive and affordability is an issue. Toronto is at 10X and Vancouver rose to a record 12x.
 
Affordability bells started to ring for real estate analysts – there is a “bubble” brewing, when will it burst? For a housing market correction there needs to be a catalyst or a triggering event.
The most obvious is a sudden rise in interest rates  – if the cost of a mortgage becomes too expensive, fewer people can afford their homes. Variable rate holders are particularly vulnerable as their commitments increase immediately upon any interest rate hike.
 
Another trigger is government intervention which has at its disposal a number of tools and strategies.
 
Canada is not alone and is not the worst exposed with the problem of trying to cool the housing market (see chart below). The challenge is a gradual cooling without causing a crash – something that would be disastrous at a time  when the economies are still grappling with the effects of the pandemic.
 
 
There is widespread consensus that the real culprit is a supply shortage and imbalance – which cannot be corrected with a knee-jerk reaction. While housing starts surged 21.6% in March 2021 for a record annualized pace of 335k units – this supply based solution moves very slowly.
 
Housing’s first big test will be when the economy begins to re-open which could lead to an increase in interest rates and redefine expectations. 
 
However the following points all tilt towards leaving the status quo alone and a continuing drift in average housing prices across the country.
 
1) The Bank of Canada has made it clear interest rates and thus mortgage affordability is not changing for the foreseeable future
2) The Federal Liberals through Adam Vaughan the Parliamentary Secretary for Housing promised to do everything possible to prevent a price decline – even a modest one was unacceptable
3) Immigration targets have been revised upwards to $1.2MM over the next 3 years – at least 1/3rd of these will settle in GTA and have a hunger to buy real estate
4) The economy is set to rebound as the country gets to finally organize an effective vaccine roll-out strategy – with this comes more spending and fuelling the real estate fire
 
Anthony Scilopati is the President and CEO of Veritas Investment Research, an equity analysis firm in Toronto that closely follows the housing market. He worries that Canada’s economy has come to depend too much on the unpredictable residential sector and leaves it vulnerable to any weakness in that area. 
Despite these reservations, he doesn’t see an imminent end to Canada’s housing addiction. 
 
Given these parameters, it’s tough to envision a scenario when the  “bubble” bursts soon.
 
No doubt those in the Canadian seats of influence over the housing market are anxiously watching and having dialogue with other countries housing influencers.
It’s tough to see a “Made in Canada” only solution to this tough to solve dilemna.
 
 

*Please note that this article only reflects the views of the author, and does not represent the stance of the company.

*The information provided here is for general information purpose only, which does not necessarily reflect the views or opinions of Bay Street Group. We assume no responsibility for its accuracy, completeness, or sufficiency.
*As for intellectual property rights of others, anyone who believes that their work has been reproduced in a way that constitutes copyright infringement may contact us.

Categoriesblog-chinese

加拿大首次购房2021新政:贷款额提高!

2021年3月大多伦多地区房价报告!销量增长97%!成交价增长21.6%再创历史新高!

突发惊喜!加拿大抵押贷款和住房公司(CMHC)2021年首次购房政策的最新调整,悄悄地发布了!下周生效!

除了政府补贴的首付以外,首次购房者在多伦多,温哥华、维多利亚置业时,年收入不能超过12万的限制放宽到了15万,最高贷款金额从收入的4倍提高到了4.5倍。贷款金额从48万升为15X4.5=67.5万。

境内的非居民,即将成为新移民者,全部适用这个政策。

加拿大首次购房奖励计划(FTHBI)

在2019加拿大联邦大选时,现任总理杜鲁多推出了首次购房者奖励计划(FTHBI),并于19年9月2日正式实施。该计划相当于政府提供一定金额的资助(鼓励金),帮助购房者减少每月所需的房贷还款额。

有资格享受这个政策的必须是首次购房者,年收入不能超过12万元(2021年新政调整提高到15万),另外所持有的房贷金额,加上鼓励金额,不得超过参与者家庭年收入的4倍(2021年新政调整提高到4.5倍)。

具体的政策措施包括:

对于购买现有房屋,可以获得5%的鼓励金额。对购买新建房屋,可以获得5%或10%的奖励金额。

对于新的或转售的移动/制造房屋,可提供5%的鼓励金额。

鼓励新建住房的供应。

不需要持续还款,鼓励也不计利息,借款人可随时偿还鼓励金额,无需支付提前付清罚款。

政府所拥有的股权价值随住房价值的上下浮动而变。

买方必须在25年后,或是在房产出售之时,偿还鼓励金。

根据下表,如果一个家庭要购买50万元的住房,该政策每月可节省286元或每年3430元左右。

政府的目的是让更多的中产阶层、以及那些努力工作争取加入中产的人士找到安全、便利和可负担的住房。这一政策将帮助全加拿大近10万户家庭拥有他们的第一套住房。

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Categoriesblog-chinese

2021年3月大多伦多地区房价报告!销量增长97%!成交价增长21.6%再创历史新高!

2021年3月大多伦多地区房价报告!销量增长97%!成交价增长21.6%再创历史新高!

2021年3月大多伦多地区房价报告!销量增长97%!成交价增长21.6%再创历史新高!

根据大多伦多地区地产局(TRREB)2021年4月6日发布的最新报告显示,今年3月份大多伦多地区房地产销量和房价双双上涨,房屋销量高达15,652 套,比去年同期的7,945套上涨 97%,创下单月销售纪录。

2021年3月大多伦多地区各类房屋平均成交价格同比上升21.6%,从2020年3月的$902,787升至$1,097,565,目前大多伦多地区的房屋成交均价已高度接近110万!

2021年3月大多伦多地区低层住宅类物业量价齐涨。仅416地区的公寓成交价小幅下降。

2021年3月大多伦多地区独立屋成交量同比去年上涨103.5%,均价增长26.6%达到$1,402,849

2021年3月大多伦多地区半独立屋成交量同比去年上涨98.5%,均价增长17.5%达到$1,045,519

2021年3月大多伦多地区联排别墅成交量同比去年上涨90.5%,均价增长20.7%达到$870,553

2021年3月大多伦多地区共管类公寓类物业成交量上涨91.3%,均价增长2.6%至$676,052

2021年3月新上市房屋数量同比与去年增长57.3%。

2021年3月上市但未在本月卖出的物业数量同比2020年3月减少了0.7%,平均卖出所用时间为10天,同比2020年3月的平均13天售出缩短了3天。

2021年3月大多伦多地区物业平均成交价为$1,097,565加元,同比2020年3月增长了21.6%。

自2021年开年以来,大多伦多地区的房地产市场连续3个月保持创纪录的增长。较低的借贷成本降低了买家的还款压力,也无形中推动了房屋价格的增长。

很多卖家看到市场红火,房价不断上涨,也从按兵不动到纷纷出手,导致3月份房屋上市量大增,相比2020年3月的14,434套增至22,709套,涨幅高达57%。虽然上市物业数量大幅增长,但是待售物业在市场上的天数却同比23.1%。这也说明了房子比以前更加好卖。

多伦多地产局称,目前主要是多伦多周边地区的低层物业在推动整个多伦多地区房地产市场成交量及价格的增长 。

多伦多地产局首席市场分析师Jason Mercer在一份新闻稿也指出,随着成交量增长大大超过房屋上市量的增长,在某些市场领域或者针对某些房型,买家之间的竞争越来越激烈,导致该类房屋价格出现两位数的增长。如果未来没有显著增加的房源供应,那么这个情况将会继续存在。

 

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Budget 2021 – Fails to Curb Demand and Prices Will Continue to Rise

Budget 2021 - Fails to Curb Demand and Prices Will Continue to Rise

The Federal  Government introduced its first pandemic budget on April 19th 2021 and committed to the following housing initiatives.

  • $2.5 billion to Canada Mortgage and Housing Corporation over seven years, to fund the Rapid Housing Initiative, Affordable Housing Innovation Fund, Canada Housing Benefit and Federal Community Housing Initiative

  • $1.3 billion, advanced and reallocated to previously announced funding to build and repair units and convert commercial space into rentals

  • $3.8 billion to build, repair and support 35,000 affordable housing units

  • 1% value-based tax proposed on vacant homes Canada-wide, owned by foreign non-residents

The budget was not expected to set out major housing reforms or cooling measures and the ongoing nationwide shortage of properties continues to drive up home resales and rental rates while hurting affordability across the spectrum.

With the annual 1% tax signalling Ottawa’s dislike of the housing supply not being maximized, it is highly unlikely to push homeowners to rent or sell their houses – many regarding it simply as “the price of doing business”.

Given the new Immigration Levels Plan 2021-2023 committing to 1.2MM new immigrants any COVID – 19 induced shortfall will only become more acute. The problem is exacerbated in the major metropolitan centres across the country with The Greater Toronto Area (GTA) usually absorbing at least at least a third of the new demand for real estate.

Basic economics reminds us that with increasing demand and a supply shortfall prices only have one direction to trend – upwards.

Until potent and progresssive cooling measures are introduced and the underlying issue of addressing the housing supply leads to cultivating a much healthier balance between supply and demand all initiatives by governments including those listed above will be band-aid remedies at best.

Douglas Porter, the Chief Economist with The Bank of Montreal is succinct.

“These are not insignificant measures – I just don’t believe that stacked up against the tidal wave of demand that they can make much of a dent”.

*The information provided here is for general information purpose only, which does not necessarily reflect the views or opinions of Bay Street Group. We assume no responsibility for its accuracy, completeness, or sufficiency.
*As for intellectual property rights of others, anyone who believes that their work has been reproduced in a way that constitutes copyright infringement may contact us.

Categoriesblog-chinese

2021年3月加拿大全国新房动工量创纪录!

B-20房贷压力测试利率将上调至5.25%

据加拿大《金融邮报》报道,加拿大按揭与房屋公司(CMHC)发布的数据显示,今年3月份按季节调整的年度新屋开工量为 335,200套,比2月份上升 21.6%,创下单月最高纪录。

3月份新屋动工量也高于分析师们的预期,多数分析师们曾经预测,3月份新屋开工量应该有250,000套。

从不同房型来看,城市多单位的新屋动工量为222,358套,上升33.8%,独立屋动工量78,615套,略升3.6%。

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B-20房贷压力测试利率将上调至5.25%

B-20房贷压力测试利率将上调至5.25%

据CBC于2021年4月8日下午发布的消息,加拿大商业银行的监管机构——联邦金融管理办公室(OSFI)将B-20房贷压力测试水平提高至5.25%、或者比银行提供给借款人的市场利率高2个百分点,以较高的利率为准,从2021年6月1日开始实施。

不过,加通社的报道说,这个新压力测试利率在正式生效前会经过一轮咨询,意思是利率还有可能微调。

当前,加拿大各大商业银行发布的平均5年期固定房贷指标利率是4.79%,但实际的5年期固定房贷利率大概在2%多一点,那么4.79%也就是当前用于房贷压力测试的利率。

去年3月、5月和8月,加拿大央行曾连续三次下调了5年期固定房贷指标利率,从5.19%下调至4.79%,央行行长还曾表示这个低利率将至少保持到2023年。

但是,现在,仅仅过了大半年,联邦政府终于抵不住一个多月来媒体的连番轰炸,出手调控楼市了!贷款压力上调至5.25%,甚至比新冠大流行之前还高0.06%。

联邦金管办主任Jeremy Rudin对上调至5.25%给出的解释是“系统需要为回到大流行前的情况做好准备,那时利率将会再次调高”。

他说,“即使以最近的标准来看,我们的利率也非常低……但从某种意义上说,它是暂时的。我们要确保,现在的房贷在三、四或五年后续期时,放贷机构能得到保护,这样借款人就有能力偿还这些债务,并维护金融系统的稳定。”

这意味着借款人需要证明他们有能力在利率更高的情况下偿还房贷,才可能获得银行的贷款,也意味着会将一批潜在购房者挡在楼市外面,并最终在一定程度上减轻加国房价上行的压力。

加国现行的贷款压力测试政策从2018年初开始实施,至今已有3年多。联邦政府出台这个政策的初衷就是给2016年、2017年过热的楼市降温,并在2017年秋天颁布。此后,一批买家就赶在2018年1月1日之前,跑步进入楼市。估计从现在到6月1日,这个现象会再现。

2018年B-20政策正式实施后,大温的楼市逐渐进入回调,到2019年又开始缓步上升;2020年突如其来的新冠疫情导致楼市短暂停滞之后,在央行连续降息、政府大把撒钱的财政政策之下,又步入上升通道;到2020年底,楼市开始出现过热迹象,抢房大战越演越烈,房价上涨过快,终于引来联邦政府出手。

据加通社的报道,当前这个上调的贷款压力测试利率还有可能扩大到必须购买贷款保险的借款人,也就是首付低于20%的买家。加拿大道明银行贷款中心的首席经济学家Sherry Cooper表示,联邦财政部有可能跟从联邦金管办的步伐,上调房贷受保借款人的压力测试利率。

房产专家认为,以更高的利率来测试买家的还款能力,在同样收入情况下,买家能够借到的钱将大幅减少。据一些媒体估计,加拿大中位数收入的家庭购买力将减少25%,意味着如果你以前能买100万的房子现在只能买75万的。

Ratehub的联合创始人James Laird说,监管机构近期的提议将使首次购房者获得房贷的资格变得更加困难,但如果这项政策能够起到减缓房价升值的预期效果,从长远来看将对他们有所帮助。

联邦金管办主任Jeremy Rudin还表示,以后将会在每年的12月对贷款压力测试利率进行审查,以更适应市场的变化。

什么是B-20贷款压力测试

根据加拿大法律,首付未达20%的按揭借款人必须要购买房屋贷款保险。这份保险动辄上千加元,为房屋贷款的0.6%-4.5%。以CMHC为例,一座首付$5万的$50万房屋,借款人将要花费近$1.4万来为所贷的$45万保险。

为进一步防范金融风险,2016年10月17日,联邦金管办出台规定要求首付低于20%的借款人必须进行房贷压力测试,影响了大批首次购房者。

一年后的2017年10月17日,联邦金管办将贷款压力测试扩大到首付超过20%的借款人(即不用够买房贷保险的借款人),并公示了《B-20准则》的最终版本,于2018年1月1日正式实施,以确保他们能够承受更高的按揭利率冲击。

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Bank of Canada Maintains Current Level of Policy Rate

Bank of Canada Maintains Current Level of Policy Rate; Still Expected to Remain on Hold Until 2023

In a scheduled announcement on March 10, 2021, the Bank of Canada kept its target for the overnight lending rate at its effective lower bound of 0.25%. The Bank signaled it will continue to keep rates low until economic slack is absorbed and inflation is sustainably back to its 2% target, which the Bank doesn’t anticipate will happen until 2023. The Bank also recommitted to maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.

Despite ongoing challenges across regions and sectors, the Bank is seeing a recovery in the global and U.S. economy, with the U.S. economic recovery gaining momentum as COVID-19 infections decline and fiscal support boosts income and consumption. In Canada, the Bank noted the economy is proving to be more resilient than anticipated to the second wave of the virus and the associated containment measures, with GDP growing by 9.6% in the final quarter of 2020 and a stronger housing market highlighted as a source of strength. The strength of economic activity in the U.S. and higher commodity prices have also brightened the prospects for exports and business investment according to the Bank.

Even with this stronger near-term outlook, the Bank still sees considerable room for improvement and further uncertainty about the evolution of the virus and the path of economic growth. The labour market has a long way to go, particularly regarding women, low-wage workers, and young people. Employment levels will likely take a long time to return to pre-pandemic levels. The threat of new, more transmissible variants of the virus also poses the largest downside risk to economic activity, as localized outbreaks and restrictions could restrain growth and slow the recovery.

Canada’s major chartered banks are currently advertising five-year fixed mortgage special interest rates of around 1.99%. Home buyers can often negotiate the interest rate for mortgage financing based on their creditworthiness and the degree to which they do other banking business with the mortgage lender. 

The Bank of Canada’s next scheduled interest rate announcement will be on April 21, 2021 and will be accompanied by a full update of the Bank’s outlook for the economy and inflation, including risks to the projection, in its Monetary Policy Report.

 

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