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…The OECD house price-to-income ratio index…measuring an affordability fundamental, shows that Canada’s housing is severely overvalued…[with] the second fastest growing gap between home prices and incomes in the developed world….
The OECD Indexed House Price-To-Income Ratio For OECD countries. 2015 = 100.
Source: OECD
Canadian real estate prices have surged 41.9% faster than incomes…[since] 2015…[versus] 30.5% in the U.S… The Netherlands is the only advanced economy with a higher ratio than Canada…showing a massive leap in just six years…
Canada’s massive gap is partially due to the sheer length it has persisted. After central banks overstimulated markets in 2020, prices surged nearly everywhere. In contrast, Canada was flagged by the US Federal Reserve back in 2015 for housing exuberance. By 2016, the country’s real estate fit the criteria for a full real estate bubble. Home prices have been on a breakaway for almost half a decade, leading to an unreal gap. Experts warn the wider this gap gets, the more pain it will require to correct.
The above version of the original post by Stephen Punwasi (betterdwelling.com) was edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
Please Donate Some MONEY to munKNEE.com – Thank You! 1. Canadian Real Estate Prices Are Expected To Fall 24% By Mid-2024 Oxford Economics forecasts home prices falling 24% by mid-2024 as a result of higher interest rates and anti-speculation policies that are expected to begin this fall and, if these measures fail to correct prices and prices rise further, a crash of 40% and a financial crisis is expected. 2. Canadian Real Estate: In the Later Stage of a “Speculative Fever” People are putting a disproportionate amount of capital into housing but Canadian real estate is in the later stage of a “speculative fever,” said the country’s bank regulator, calling it herd mentality. 3. AVERAGE House/Condo Price In Greater Toronto Now $1,259,900 – Yes, $1,259,900! Greater Toronto real estate prices are surging higher at the fastest pace in history. The TRREB composite benchmark price hit $1,259,900 in January, up 4.29% ($51,900) from the previous month. 4. Canadian Real Estate Prices Almost Doubled vs. the U.S. in 2021! The U.S. Federal Reserve (the Fed) updated its real home price index for Q3 2021. All G7 countries are seeing home price growth, but nowhere is quite like Canada. Canadian real estate prices are some of the fastest growing in the world, and have been for some time. 5. Home Prices Have Grown 13x Faster In Canada Than In The U.S.! The U.S. Federal Reserve considers both Canada and the U.S. to be in real estate bubbles but they’re even close to the same issue. Here’s why. 6. The Fed Says the U.S. Is Now Officially In A Real Estate Bubble For the first time since 2007 the Fed’s Exuberance Index is warning that U.S. real estate prices are in a bubble. Did the Fed even notice? 7. Fed’s Exuberance Index Shows Canada’s Real Estate To Be A “Bubble On A Bubble” The U.S. Federal Reserve’s latest Exuberance Index (Q2), considered a “smoking gun” for bubbles, shows Canada is well into a real estate bubble – a bubble on a bubble. 8. Some Real Estate Markets In Canada Are Overvalued By As Much As 91%! Moody’s Analytics’ latest Canadian real estate model shows markets are overvalued by up to 91% across the country. As disastrous as that sounds, the firm isn’t expecting a big housing crash [but] the baseline model shows low to no price growth, as mortgage rates rise. 9.Canadian Residential Real Estate Prices Growing the Fastest In the G7
