Posted 5.30.17 @ 0:0
Canadians are not worried at all that some experts are saying that a housing bubble is on the horizon in some areas of Canada. A recent weekly Bloomberg-Nanos Index confirmed this, showing that Canadian’s confidence in housing has reached another record high. This is despite som of the respondents having a negative view of their personal finances.
A New High
With confidence that is at its highest since 2008, the survey found out that about half of all Canadians, a huge 48.5%, expect that house prices will still rise in the following 6 months. Less than 11% said that they are expecting house prices to take a plunge.
Pollster Nik Nanos was recorded to have stated that then upwards trend of real estate prices is continuing to drive consumer confidence.
Robert Lawrie, a Bloomberg economist shared that since the start of the year, household expectations have gone up by about 10% as a result of oil price stabilization and the continuing surge of property values.
He also shared that consumer thoughts about their personal finances have taken a downwards trend, moving policy makers to make their next focus addressing this concern.
Meanwhile, in the priciest areas of Canada’s housing market, such as the Vancouver and Toronto regions, many market observers are getting concerned about high debt levels.
It is to be noted that house prices in Toronto have gone up 33% in March of this year compared to March 2016, making the average home price stack up a figure of $916,567. In Vancouver, home prices are moving slower, although the trend of home price elevation remains. Vancouver recorded a benchmark home price of $919,300 in March of this year.
Teranet house price index co-publisher National Bank of Canada warned that some Canadian housing markets may be experiencing an irrational exuberance of sorts, mentioning that more than half of the regional markets in Canada are experiencing 10% annual price growth.
Canadian household debts have hit a record high again and again in recent years in view of ballooning mortgages. Debt these days stands at $1.67 per dollar of disposable income.
The elevated debt levels mentioned above is part of the reason why Canada was cited by the Bank for International Settlements as next to China in terms of those identified to be high-risk nations for experiencing a financial crisis.
Telling Survey Results
It took 4 waves of surveys, with about 1,000 Canadians being a part of the survey which lasted into the second half of April to get the data shared here. The last day of the survey was the same day when the new housing rules were introduced in Ontario, the same new rules that include a 15% foreign speculator’s tax.
Real estate experts believe that the foreign speculator’s tax will not be enough to cool down the piping-hot Toronto real estate market. The reason for this is because foreign buyers are only a very small part of who gets to purchase a home in the buyer battlefield that is Toronto.
As for how people are viewing their personal financial status, the Bloomberg-Nanos survey shared that 28% see their finances worsening, 52% said they see no change, and 18% shared that they see an improvement.
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