May 18 2012
What’s Hot In Canada Real Estate? Single-Family Homes Make Comeback
Canada real estate market is experiencing strong gains, however, the increased sales numbers has led to overvaluation. Vancouver’s real estate market is 10 to 15 percent overvalued, based upon Toronto-Dominion, Canada’s second-largest bank. If a sudden correction occurs, it would be 3 x worse than the correction in the 1990s. Foreign investors and the rapid development of high-rise condos have led to buyers snapping up properties while loan rates are low. Some say that homeowners have taken on too much. The ratio of debt-to-personal earnings are about 151 percent. This is definitely a concerning number and most fear that if unemployment grows, homeowners wouldn’t have the cash reserves to ride out an economic storm. This article has been shared by Whistler is Home. You can find Whistler is Home by searching Whistler real estate co.
Financial consultants have predicted that by the end of 2013, the debt-to-income ratio could reach 160 percent, which is the peak the United States and the United Kingdom saw before their market corrections. The Bank of Canada, however, has argued that in the event the government boosts interest rates while rates remain low in the United States, that it might slow economic growth.
Many predict the federal government will tighten lending standards this year. Economists caution that a gradual approach is prudent in order to prevent a sudden market correction.
Data reveals that 60 percent of local housing markets were balanced in February. In January, there seemed to be more buyers’ markets and fewer sellers’ markets. The national average price for homes in February 2012 was $373,763, that is a 2% increase from February 2011. Homebuyers have been purchasing single-family homes over condos or semi-detached homes in Toronto and many other large metro areas. Single-family homes are often priced higher and this demand is driving the national average sales price up.
Many locals are complaining how the rules are too lax on foreign investors and that they are getting priced out of their market. It is a fact that Canada does not have many restrictions on foreign ownership. For example, foreign owners that don’t intend to spend more than 6 months in the country do not have to request residency.
Much of the international controversy about homeownership has not actually focused on actual homes but farmland. In Canada, provinces particularly Alberta, Saskatchewan, Manitoba and Quebec have limitations regarding the volume of land foreign investors may purchase. Canadians’ would just like the government to impose stricter regulations on foreign investors since they fear they’re going to be priced out of their market.
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