Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Canadian home prices surged 32% in March from a year earlier, the kind of surge that has led governments to clamp down on speculators, as a pandemic exodus to the suburbs fuels record sales.
The Canadian Real Estate Association reported Thursday that sales climbed 5.2% on the month to 76,259 units and were up 76% from a year ago when health lockdowns made open houses impossible. The average sales price gain in dollar terms is a rise to CAD716,828 from CAD544,824, a jump that's well above a typical family's annual income.
The federal government earlier this month resumed study of a tougher mortgage rate stress test for some borrowers, and in the past when prices rose at a 30% pace local governments imposed new taxes and toughened other rules to deter flipping and speculation. This time around, with immigration frozen by the pandemic, it's clearer that foreign buyers aren't driving up the prices of condos in downtown Vancouver and Toronto.
The current housing squeeze is being driven by broad strength outside major cities and by a lack of supply with people already in big homes reluctant to sell. The 1.7 months of inventory in March is a record low, compared with the long-term average of about five months.
The Bank of Canada is watching closely for signs prices are being driven by people jumping into the market just to get ahead of surging prices, and Finance Minister Chrystia Freeland said in response to an MNI question a few weeks ago she's watching the housing market and affordability very closely.
Record Canadian household debts were a concern even before the pandemic, which led about 1 million mortgage borrowers to tap into a special payment deferral program.
Source: CREA
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.