Economist warns that the Canadian housing market is close to reaching “peak crazy”
The August 12 release of the latest edition of the Teranet-National Bank Composite House Price Index revealed that Canadian home prices reached unprecedented heights by growing by 2.0 per cent month-over-month in July, fueled by major gains in the red-hot markets of Toronto and Vancouver.
Last month also saw prices go up by 10.9 per cent year-over-year, with gains observed in 7 of 11 major cities surveyed, BNN and Reuters reported.
“We might be close to peak crazy in the housing market. The drop off in home sales over the past couple of months suggests that the pace of house price appreciation will begin to moderate later this year,” Capital Economics chief economist (North America) Paul Ashworth wrote in a report.
Despite the recent implementation of a punitive 15 per cent tax on foreign buyers of homes in British Columbia, Vancouver continued its 18-month streak of housing cost increases, spiking up by 2.3 per cent from June.
Meanwhile, Toronto saw a 3.1 per cent increase in home prices, going up for the 14th time in the past 15 months.
Even comparatively sedate markets (such as flat growth in Edmonton and a 0.1 per cent decrease in Calgary) and slower pace of home sales have done little to dent the pricing juggernaut, which has stoked fears that Canadian housing will become more and more inaccessible to a progressively larger segment of the domestic buying population.
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Last month also saw prices go up by 10.9 per cent year-over-year, with gains observed in 7 of 11 major cities surveyed, BNN and Reuters reported.
“We might be close to peak crazy in the housing market. The drop off in home sales over the past couple of months suggests that the pace of house price appreciation will begin to moderate later this year,” Capital Economics chief economist (North America) Paul Ashworth wrote in a report.
Despite the recent implementation of a punitive 15 per cent tax on foreign buyers of homes in British Columbia, Vancouver continued its 18-month streak of housing cost increases, spiking up by 2.3 per cent from June.
Meanwhile, Toronto saw a 3.1 per cent increase in home prices, going up for the 14th time in the past 15 months.
Even comparatively sedate markets (such as flat growth in Edmonton and a 0.1 per cent decrease in Calgary) and slower pace of home sales have done little to dent the pricing juggernaut, which has stoked fears that Canadian housing will become more and more inaccessible to a progressively larger segment of the domestic buying population.
Related Stories:
Cooling down the housing market could harm the economy - CIBC
Vibrant housing segment now a crucial factor in Canadian GDP growth
