Housing Price Gain Across Canada
By ebizniz on June 16, 2007 - 5:00pm
On the housing market front, higher house prices are reported across Canada. In today's Financial Post article,
"INCOMES LAG BEHIND RISING HOUSE PRICES" investors are reported to be cashing on the hot housing market in places like Saskatoon.
You can follow and track the housing market for 6 Canadian cities by following
Brian Ripley's housing price charts.
The chart showed that Edmonton house prices have increased significantly since early 2006. The charts showed that Vancouver, Calgary and Edmonton are way ahead of the other Canadian cities in housing price increase for the past 18 months.
There are signs of pricing gains in Toronto and Montreal lately. Ottawa will likely attract buying interest as house prices are still low compared with other major Canadian centers. The housing markets in Toronto, Montreal and Ottawa could experience some catching up on real estate prices.
In addition to the above major cities, real estate investors will have to search out other Canadian towns that have good attributes for real estate value appreciation.
There are still a lot of liquidity and excess investment capital in the market for real estate assets, and there are no signs as yet on the Canadian housing market turning bad.
Am I wrong in thinking that one of the prime reasons that home ownership is becoming an impossibility for most Canadians because prime property has been purchased by folks that have made their fortune outside of Canada (Hong Kong?). These people may or may not be Canadian citizens. Why are statistics on this situation not more readily available and why is this situation allowed to continue.
Real estate is subject to supply and demand and if there are more people buying and less people selling, prices will go up. The reverse will result in a decline in the prices if there are more sellers than buyers. There are no published data that I know of on property ownership by foreigners. But, in the US when house prices spiked up since 2001 and before the decline that started some 2 years ago, foreigners buying could not be the cause of the price gains. Loose or no credit control was the fuel that caused the run-up in house prices. When the party was over in the US, demand for housing crashed resulting in the loses and price deflation happening in the US now.
Vancouver may have less problems with loose credit and irresponsible lending practices, but we have the same problem with too high property prices. Vancouver is not immuned to the economic law of supply and demand. Housing affordability is a very serious problem here. A change in the housing market sentiment will keep buyers on the side-line and turn investors to sellers resulting in the decline in home prices.