Canada’s mad housing bubble has seen several experts forecast the imminent arrival of a recession for a number of years now, but for some heavenly reason, it still hasn’t occurred. Several parts of Canada are technically said to be under recession right now but we still have not reached the stage of a country-wide recession.
Prices in Toronto and Vancouver are soon expected to give the world’s costliest cities a run for their money, and as the housing starts for luxury homes increases, their prices are only going to go up. The real estate market has literally gone bonkers and we do not expect it to change anytime soon.
Chinese investment is helping the market
Throughout the largest cities such as Toronto and Vancouver, the sales of luxury homes actually rose in 2016 and have posted stable sales activity this year. This is mainly due to a great amount of Chinese investment in these cities as locals are simply unable to afford the staggering prices in the most expensive parts of the Canadian real estate market.
Goldman Sachs expects the bust to occur in two years
According to a report published by Goldman Sachs in May 2017, the firm estimates that there is a 1/3 chance that the prices of Canadian homes literally go bust within a couple of years. The report mentions that the current level of housing starts are mostly unsustainable, and housing starts in the country are about 10% than the forecasted demand. We could witness anywhere between 5-30% decrease in average prices this year. The market is heavily imbalanced right now and regional disparities are contributing to this problem.
Your house makes more money than you!
Your home literally has the dream job. It just sits there and makes money, and as of December 2016, the price of an average Canadian dwelling rose by $50,619 in comparison to December 2015 figures. The average income of a Canadian at the same time was $49,565 as wages had only increased by 953.16% in the preceding 12 months. If only we could become a house, life would be so much easier!