Before the recent federal election, the Liberal Party promised to “undertake a review of escalating home prices in high-priced markets – such as Vancouver and Toronto – to determine whether speculation is driving up the cost of housing and survey the policy tools that could keep home ownership within reach for more Canadians.”
But this may be one of the first promises to fall by the wayside under our new government, judging from Finance Minister Bill Morneau’s recent announcement that Ottawa has no further plans to cool the housing market, despite being concerned about the economic risks of high household debt.
Recent data from B.C.’s Macdonald Realty, one of the country’s largest brokers, shows that 33 per cent of Vancouver’s properties over all – and an astonishing 70 per cent of properties valued over $3-million – are sold to offshore buyers. Bidding wars for selective (mostly single-detached) properties, keep driving prices ever higher, at the expense of middle-class Canadians whose salaries make them unable to compete in the housing market. Today, the average Toronto house cost is 8.2 times the average median income, and it’s a staggering 11.2 times for Vancouver.
The overbuilt condo market seems poised for a nearly immediate correction. The monthly Toronto Condo News magazine recently reported on condo sales in the Yonge North Corridor – the affluent and most densely populated condo community in Canada. Their trending charts show price declines of about $40,000 per unit between the first and third quarters of 2015, with units now taking an average of 35 days to sell, compared with 21 days at the beginning of 2014. >>> read full article
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