Toronto And Vancouver Housing Markets
Housing markets in the great city of Canada and Vancouver might be faced with major economic watershed, which could distress Canada’s Gross Domestic Products (GDP) pulling the cost of homes to a 40% estimation.
David Madani, senior Canadian economist at Capital housing market, in a statement with the Business News Network last Monday, said, “I see a modification between 20-40% in the Canadian housing market in five years.”
“Once prices stop rising, the whole motive for speculating in the market disappears, sales have fallen and usually price follows sales,” he told the Business News Network.
According to the CTV NEWS, “Madani cautioned Capital Economic subscribers about the possible recession in a newsletter on Friday. He said tough principles are expected to repress a recent rebound in Vancouver’s home prices, while Toronto will likely experience a price correction in the midst of its current slowdown in sales”.
Madani noted “the housing market appears on the threshold of a downturn and will negatively impact economic growth from the second quarter on wards”. He further noted, “the economic outlook for this year and next appears to be deteriorating”. He stated that all the proof is shown in the latest housing data from the Real Estate Board of Greater Vancouver and the Toronto Real Estate Board.
The assessments of sales in Vancouver homes have surged 22.8% from April to May of this year, nevertheless remain 8.5% lower than last year’s record-high in May of 2016. New listings fell 3.9% year-over-year in May, however rose to 23.2% when compared to April 2017, estimated the CTV News.
According to TREB data, sales in Toronto homes have plummeted 20.3% from May 2016 to last month. Detached home sales were down 26.3%, whilst condo sales plunged by 6.4%.
John Pasalis, Realosophy president broker, said house sales in the Greater Toronto Area were down 44% for the week ending June 9, in comparison to the same period last year. New listings for houses were up 34% for the same period, condo sales fell by 22%, whilst new listings rose per 11% year-over-year last week.
Madani blames the Toronto sales downturn on tougher mortgage insurance principles, severer provincial regulations on rent control and a new tax on foreign buyers.
“Considering that Toronto accounts for 20% of the national housing market, this nosedive in sales will hit national second-quarter GDP, deducting as much as 0.5% points. All things measured, the housing market appears to be reeling on the brink of a downturn, which is a bad sign for GDP growth prospects,” he noted.
J C Loum
