SMM News: according to the Canadian Le Huo net Lahoo.ca on Wednesday (July 17) reported that a recent study shows that Canada has a serious real estate bubble, its severity has been "high" the first in the world!
In assessing the situation of the real estate market in various countries, the study refers to four indicators, namely, the price-to-rent ratio, the price-to-income ratio, the actual house price and the proportion of household loans to GDP.
As a result, New Zealand and Canada topped the bubble, followed by Australia, the UK, Norway and Sweden.
Canadian house prices are skyrocketing
More surprisingly, the report points out that real house prices in Canada are the highest in the world, and that since 2000, Canada has been more terrifying than the major bubble cities in the United States. As of the first half of the year, real estate prices in Toronto were up 239.9% from a year earlier; prices in Montreal were up 189%; and, most notably, in Vancouver, prices soared 315%.
No city with the fastest surge in house prices was Toronto, where prices rose 33.67% higher than Los Angeles, 45.27% higher than San Francisco, 61.01% higher than Seattle and 133.39% higher than New York between January 2000 and March 2019.
Toronto rental market is expensive
Vancouver and Toronto remain the two most expensive rental cities in Canada, according to a new rental report.
In Vancouver, the average rent for a two-bedroom apartment is 2833 yuan. In Toronto, the average rent for a two-bedroom apartment is about 2782 yuan, and 2300 yuan for a single room, and nine of the top 10 rental cities are in the Greater Toronto area.
For international students who need to rent a house just after graduation, the rent is very stressful.
The cost of the collapse of the real estate bubble
Despite its apparent prosperity, Canada's economy has been "bogged down" for years in a row, and the poor economic data are surprising.
According to the World Bank, Canada's GDP was $1.843 trillion in 2013, up from $1.653 trillion in 2017, and real estate has a growing impact on Canadian GDP. That is to say, when the housing market is bad, the entire Canadian economy will be in the doldrums.
After Canada's real estate bubble burst, there is no doubt that the economy will be weak, people's quality of life will be affected, and even repeat the situation of borrowing money to buy food.
In addition, it is worth mentioning that Canadian household debt is now 101 per cent of its GDP, the highest in the world, compared with less than 80 per cent of GDP in the US and 60 per cent of GDP in Germany and France.
The government has continued to intervene
For such high house prices, the Canadian official attitude is to resolutely squeeze out the real estate bubble.
The Government of Canada has mainly come up with the following three means:
First, the examination of housing loans is becoming more and more stringent, especially for foreign property speculators, it is not so easy to blindly increase leverage.
Second, raise the mortgage interest rate, too low mortgage interest rate is easy to stimulate domestic and foreign investors to speculate in real estate.
Third, Canadian officials impose a 15% foreign buyer tax on foreigners who buy homes in Vancouver and Toronto, which should be considered a rather harmful measure, and the enthusiasm of speculating tenants has dropped.
At present, after two years of continuous adjustment, the signs of the bursting of the Canadian housing bubble are becoming more and more obvious, such as a marked decline in home sales, a sudden surge in the number of listed houses, an increase in wait-and-see buyers, and so on.