Housing

The map below, based on data from the Real Estate Bubble Index by UBS, examines 25 global cities, scoring them based on their bubble risk. Do you live in one of the cities highlighted?

UBS published its 2022 Global Real Estate Bubble Index this week, and Toronto took the top spot. Vancouver remains at #6 and Miami is the top American city at #10.

Construction cranes for residential housing in Q3 2022 in select North American cities. 0 25 50 75 100 125 Toronto Seattle Denver Chicago Calgary Los Angeles Washington Portland San Francisco Phoenix Honolulu New York Las Vegas Boston Cranes San Francisco Residential: 4 Region Residential Toronto 126 Seattle 36 Denver 23 Chicago 14 Calgary 12 Los Angeles 10 Washington 7 Portland 5 San Francisco 4 Phoenix 3 Honolulu 2 New York 1 Las Vegas 0 Boston 0 Source: RLB; Better Dwelling. In contrast, the next most residential cranes were located in Seattle (36), Denver (23), and Chicago (14). Once again, what’s happening in Toronto isn’t even close to anywhere else. The scale is reminiscent of the 2006 boom in Dubai. Hopefully things work out a little better.

...Oxford Economics has warned...that the coming hard landing for Canada’s economy will lower home prices by around 30% from the peak.

Interest rates are rising to cool inflation and remove home buyer stimulus kicking off a global real estate correction.

The OECD house price-to-income ratio index shows that Canada's housing is severely overvalued with the second fastest growing gap between home prices and incomes in the developed world.

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.

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.

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. 

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.