Don’t Blame The Foreigners!
Foreign investment in Canada has had its fair share of “Haters” recently as it has been blamed for astronomical price increases in housing especially in Vancouver and Toronto, Canada’s most attractive real estate markets. But this article cautions against the haste to blame foreign investment as the root cause for all our housing woes.
#1. Rise of the Millennials
Among the other factors that are to blame is the fact that the millennials are entering their home buying phase with plans to start a family. Considering that almost 75% of the Canada’s job growth is centered around Vancouver and Toronto one can expect that they would attract a large influx of millennials looking to work and buy a house at some point. Analysts predict that this causes undue pressure on these markets and a crash is bound to happen.
#2. No Room for Expansion
Another factor to consider is that, Vancouver as a city does not have much space for expansion as do other cities. Vancouver being the center of a mountainous region and water can only accommodate so much more buildings in the city.
Toronto on the other hand has a problem of population density especially around its more fashionable areas.
#3. Low Mortgage Rates
The longer the interest rates remain low, the more the housing prices will increase. Some believe that this trend has come to an end while others don’t think so.