All you need to know regarding the housing market in Toronto, Canada and abroad.
This week in Toronto: Can't stop won't stop - Toronto's housing market continues to soar, bidding wars intensify and John Tory attempts to improve social housing infrastructure.
Elsewhere: Oil could play a direct a role on the housing market in Canada, Paul Krugman takes aim and inequality in the United States and the U.K continues to propose news ideas to solve their real estate conundrum.
“Not only did we see a record sales result for November, but with one month left to go in 2015, we have already set a new calendar year record for home sales in the TREB market area, eclipsing the previous record set in 2007. Sales were up on a year-over-year basis for all major home types, both in the city of Toronto and surrounding regions,” Mark McLean, the board’s president, said in a statement.
Bidding wars intensify as Toronto housing market smashes records (The Globe and Mail)
“Demand for ownership housing has remained strong in the [Greater Toronto Area] throughout 2015, with sales generally increasing at a greater annual rate compared to new listings,” Jason Mercer, the group’s director of market analysis, said in a statement.
On Wednesday, Tory proposed an annual “city building” tax of 0.5 per cent added to property tax bills, dedicated to paying for transit and social housing infrastructure. He said it would be a clearly identified charge, start in 2017 and add about $13 to the average property tax bill of $2,654.50.
Will GTA apartments outpace condo builds by 2017? (Property Biz)
"Everybody has seen some of these older apartment buildings starting to deteriorate – really nobody has been building new apartments for rental for a long time,” said senior managing director Daniel Holmes. “The cap rate on existing product is trading at historical lows that will never probably be duplicated again in the size of the market we are in, buildings trading at 3 caps downtown.
There is a risk of a collapse in housing prices if oil falls to $35 US a barrel and remains there for five years, triggering unemployment of 12.5 per cent in Canada, according to Canada Mortgage and Housing Corporation.
Whenever home prices fall back to earth, Canada’s economy could lose a key pillar that’s helped drive consumer confidence. It’s called the wealth effect. Soaring home prices make us feel rich and we spend more money on that new television or other goods and services that help propel the country’s economic growth.
It turned into one of the most severe housing busts in recent memory. Between 1989 and 1996 prices in the Greater Toronto Area collapsed. In some neighborhoods, prices for some homes were cut in half. It would be more than a decade before they returned to their peak.
Nearly 40 per cent of Canadian homeowners say they have found themselves short of money to cover their monthly expenses at least once in the past year, turning to debt, cashing in savings or borrowing from family to pay the bills.
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