Toronto at High Risk Of Housing Crash
According to the Canadian Real Estate Association (CREA), new all-time sales records were posted every month, from July to September 2020. The UBS Global Real Estate Bubble Index 2020 reports that housing markets worldwide are weathering the COVID-19 pandemic. Analysts are bewildered, although they warn the blistering pace will not sustain. The actual average home price in Canada rose by 17.5% to a record-high $604,211 last month. However, UBS’s analysis shows there’s one city in North America that’s at risk of a housing crash. Toronto ranks third after Munich and Frankfurt in Germany. These three cities have the greatest housing bubble risk. While prices in British Columbia and Vancouver are inflated, the markets are not likely to overheat. The Canadian housing market is strong in the face of the health crisis. Home sales and prices are setting new records. CREA said actual sales in September 2020 rose 45.6% from the prior year, while the Home Price Index climbed to 10.3%. Smaller Ontario cities and in Ottawa region have the most significant price gains. High unemployment and declining household income could affect home prices. The stimulus packages of governments, mortgage bailouts, and low-interest rates are propping up home prices. UBS Global Wealth Management’s chief investment officer, Mark Haefele, warns that a correction phase is looming as rents in most cities are starting to fall. The problem might compound when subsidies end and pressure on incomes heighten.
Tags : INTERNATIONAL Real Estate Canadian Association Toronto