North America’s Biggest Housing-Bubble Risk Defies a Pandemic

[.Detective.]

Even a once-in-a-century pandemic isn't enough to cool the Canadian housing market, with prices nationwide now forecast to end the year higher than where they started.

The median home price in Canada is expected to reach C$693,000 ($527,000) by the end of the year, a 7% increase from the end of 2019, according to a projection from brokerage Royal LePage. The market continues to show strength across the country, with 97% of regions reporting higher home prices in the past three months, the company said.

In Toronto, which UBS says has one of the greatest housing bubble risks of any major city in the world, the average price reached C$975,980 by the end of September, up 11% from the same period a year before.

The resilience of Canada's housing market is not unique: home prices in many parts of the developed world have been defying the gloom of the Covid-19 recession. Buyers, able to borrow money at historically low rates, have looked to suburbs and smaller cities in the hunt for more space, driving up prices.

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North America’s Biggest Housing-Bubble Risk Defies a Pandemic

Even a once-in-a-century pandemic isn’t enough to cool the Canadian housing market, with prices nationwide now forecast to end the year higher than where they started.

www.bloomberg.com

 

[Ether_Snake]

WFH is a permanent trend, which the pandemic simply accelerated. As the article states, condo listings are increasing rapidly as people look to leave the urban centers, something we are seeing across all big cities, not just Toronto. People with money are rushing out, and cities will be left in serious trouble unable to raise the revenue needed to keep them afloat let alone prosper.

The future of urban centers is a transformation into urban farming facilities, but our political system disfavors taking long-term action, so it won't happen until a few exceptional governments elsewhere do it first successfully. For now, the future of cities is left in the hands of the chaotic "free market".

 

[HanzSnubSnub]

I still can't comprehend how the bubble did not burst during COVID

 

[Swiggins]

I still can't comprehend how the bubble did not burst during COVID

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Demand is still high, supply is still low.

 

[Yerffej]

I have to wait up to three years, possibly, to get my goddamn bathroom remodeled. Contractors are that busy where I am. It's nuts. Lumber prices are 3x the normal value. Shit is booming.

 

[Ether_Snake]

I have to wait up to three years, possibly, to get my goddamn bathroom remodeled. Contractors are that busy where I am. It's nuts. Lumber prices are 3x the normal value. Shit is booming.

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The price of lumber is due to Covid, or rather they're using Covid as an excuse, first and foremost.

 

[smurfx]

overseas buyers still think canada homes are a good investment. sucks for canadians wanting to live there but its gonna keep happening.

 

[AlmostMilk]

All the banks dropping the mortgage interest rates to all time low's probably is one of the bigger reasons behind it. Allowing people to refinance with much lower payments made it much easier for people to keep their homes.

 

[subpar spatula]

Just low interest rates and the fact that the majority of job losses were most likely not home owners in the first place, and those that did get furloughed for 6 months still had a job when they returned + deferred mortgages + CERB pay. The actions the Canadian government took were to help the middle class and 1% because the economy runs on them so they let the lower income people struggle.

 

[Zip]

I don't expect there to be a price crash until rates go up. Or people are forced to sell their homes en masse out of financial desperation.

 

[Randomly Generated]

I just want to be able to afford a condo that doesn't also suck ass :(

 

[.Detective.]

All the banks dropping the mortgage interest rates to all time low's probably is one of the bigger reasons behind it. Allowing people to refinance with much lower payments made it much easier for people to keep their homes.

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That, and when you look at Toronto, which is already the 3rd largest city between the US and Canada(only behind NYC and LA) and 4th overall in North America(Mexico City, NYC, LA) but growing at a rate of approximately 100k new people a year, that is a challenge to say the least.

 

[Brinbe]

it's fucked. building all these condos just to sit empty meanwhile the people that actually live here get left behind.

developers and the ford government cleaning up though

 

[.Detective.]

it's fucked. building all these condos just to sit empty meanwhile the people that actually live here get left behind.

developers and the ford government cleaning up though

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We need to start fining a hell of a lot more for unoccupied/vacant but privately owned properties.

Also happy to see AirBnB is pretty fucked with their current situation. Can't believe they had the audacity to ask for a bailout(which was rejected soundly) for their clients during Wave 1.

 

[Brinbe]

We need to start fining a hell of a lot more for unoccupied/vacant but privately owned properties.

Also happy to see AirBnB is pretty fucked with their current situation. Can't believe they had the audacity to ask for a bailout(which was rejected soundly) for their clients during Wave 1.

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we should, but people will just continue to buy/park their money here.

though this is pretty funny.

Tiny condos now the biggest losers in Toronto real estate market shakeup

Condos sized at 500 sq. ft. and under are the only form of housing firmly in buyer's-market territory

financialpost.com

]

gonna be a lot of empty condos out there in the next few years

 

[Merv]

I bought my house in 2018, my build was one of the first in the area in 10 years. Now there is is 5-6 developments in my area.

 

[Tiktaalik]

I still can't comprehend how the bubble did not burst during COVID

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1. Insanely low interest rates.
2. The people most impacted by the pandemic were never in the situation to buy a home anyway. Rich tech bros etc have been able to seamlessly shift into working from home and haven't been impacted at all.

 

[WedgeX]

DC is crazy right now. Rents are dropping because a net 15,000 left the city in a six month period this year. But housing prices are still sky rocketing. We got outbid by 100,000 and 200,000 on various houses.

 

[Minthara]

On the south shore of Montreal we bought our house for about $275,000 three years ago. We got it appraised when renewing our mortgage in January at $320,000. We've seen houses similar to ours sell for nearly $400,000 in the past month or two. If the bubble doesn't burst and we continue to maintain our house, I have no doubt we will sell it for a hefty profit in about 4 years.

 

[AMAGON]

Trying to buy a house in New Jersey is insane right now due to everyone abandoning NYC and looking to move here.

Houses are literally off the market the same day it is put up.

My sibling gave up buying a house because prices are going up while the properties sucks ass.