Bank of Canada deputy governor Toni Gravelle cautioned that “it’s too early to be definitive” about how well Canadian mortgage holders are faring with the expiry of COVID-19 payment-deferral programs, even as the data show that the heavily indebted household sector has weathered the pandemic remarkably well so far.
I don’t get that question much anymore. Partly because I’m at an age where most people I meet have paid off their mortgages. But more because everyone thinks they know what’s going to happen to interest rates: they’re going to stay low forever.
The price of a typical condo apartment across Greater Toronto is higher than last year, but coming down fast. TRREB reported the typical condo price reached $585,100 in October, up 6.15% from the same month last year. The City of Toronto condo benchmark reached $611,100, up 4.55% from last year. Both regions have seen prices slide since May, taking its toll on growth.
Vancouver plans on tripling this tax for next year. Council voted to increase the vacant home tax to 3% of the assessed value for 2021. The rate last charged was 1% in 2019, and it’s slated to increase to 1.25% in 2020. The aggressive measures are likely to cause empty homeowners to really think about whether those empty units are worth it.
Canadian housing starts increased to 214.9k (annualized) units in October, up 3% from September's 208.7k pace. On a six-month moving average basis, starts came in at 222.7k units, up from 214.4k in September.
The so-called Big Six banks are slated to reveal their fourth-quarter earnings starting Tuesday morning. Bank of Montreal and Scotiabank will kick things off, followed by the Royal Bank of Canada and National Bank of Canada on Wednesday. Canadian Imperial Bank of Commerce and the Toronto-Dominion Bank close things out on Thursday.
Mortgage balances and new auto loans were up 6.6 per cent and 11.7 per cent year over year, respectively, according to Equifax. Overall average consumer debt increased 3.3 per cent compared with the third quarter of last year.
Greater Toronto new home prices are up significantly from last year. The benchmark price of a new single-family home reached $1,211,141 in October, up 2.70% from the month before. Compared to last year, prices are 12.7% higher. Condo apartments are seeing a little more mixed movements though.
When paired with cheap money and other demand inducement schemes to push prices higher, the tax is just optics. There’s more than enough domestic speculators to fill the gap, with enough incentive. The measure provides the perception of doing something, but accomplishing very little. The opportunity is still wide open for domestic speculators, who now have a tactical advantage.
Canadian real estate agents must be looking forward to a very jolly Christmas. Statistics Canada (Stat Can) data shows ownership transfer costs, which are primarily sales commissions, reached a record high in Q3 2020. The rate of growth for the segment is now growing 11x faster than GDP.
“In order to ensure that the GST/HST applies consistently and effectively with respect to supplies of short-term accommodation in Canada facilitated by platforms, the Government proposes to apply the GST/HST on all supplies of short-term accommodation in Canada facilitated through a digital platform,” according to the federal government’s fiscal update released on Monday by Finance Minister Chrystia Freeland.
In Vancouver, which has Canada’s most expensive real estate, home sales slid 17% on an unadjusted basis compared with a month earlier, the Real Estate Board of Greater Vancouver said Wednesday. Prices were more or less flat in both cities compared with October.
The price of a typical home is rising very quickly, but those gains are far from being spread evenly. TRREB reported the price of a typical home reached $902,500 in November, up 10.56% from the same month last year. In the City, the price reached $958,200, up 5.95% from last year. This means suburban homes are rising much faster, with most of the gains concentrated in detached homes.
About 5.8 million adults say they are somewhat to very likely to face eviction or foreclosure in the next two months, according to a survey completed Nov. 9 by the U.S. Census Bureau. That accounts for a third of the 17.8 million adults in households that are behind on rent or mortgage payments.
Recent housing data show how tight inventories already are. The supply of existing homes fell to 2.5 months in October, a record low for a period when normal inventory levels are four to five months of supply. For new homes, the months’ supply of inventory fell to 3.3 in October, also a record low.