171–180 of 214 posts
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I don't get how that could possibly be true, given that the CAD has depreciated something like 30% in the past few years vs USD?
Not everything bought in Canada is traded internationally and denominated in USD.
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I don't get how that could possibly be true, given that the CAD has depreciated something like 30% in the past few years vs USD?
The USD isn't some gold standard of truth. Like any currency it also appreciates and depreciates over time. You can't just look at the exchange rate between two currencies and make any meaningfully claims. Definitely, you can't make any claims about Canadian inflation by just looking at the exchange rate. When we went up to 1.10 it didn't cause deflation and when we went down to the low .70s we didn't see inflation.
This will be very interesting to watch. The Toronto real estate market has already started to correct. Prices are down 20-30% seconds nice earlier this summer. A ton of people eager to buy "before prices go even higher" are getting creamed. Interest rates going up will only make this worse. Hold on tight!!
An apt caption for the uncertainty in Toronto introduced by Wynne's last desperate attempts to change people's minds on her.
The commonwealth countries are all facing a property bubble (Canada, New Zealand, Australia, etc). The household debt levels and property prices didn't taper off nearly as much following the 2008 US housing crisis and has pretty much continued unabated: http://www.huffingtonpost.ca/stephen-punwasi/real-estate-bub... Which is fascinating to consider that the Bank of Canada, et al, have let this happen for so long and…
They are doing the right things here and targeting increased rates for investment owners over home occupiers
Relatedly, the Toronto housing market that kept shooting up even as the US hit its 2008 housing crisis now have hit their top: https://www.bloomberg.com/news/articles/2017-09-06/toronto-h...
Toronto's property market is insane. I am still seeing condos (e.g. Gibson near North York center) being priced at 600K+ for 1+1 and larger units well over 1 million dollars. Not sure who can afford this. Places as far as Vaughan and Milton are expensive. We're talking decent detached houses (slightly above starter home) for over 1 million.
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> Inflation has occurred outside of CPI basket, most notably in equity markets and real estate prices in large urban cities Those are assets rather than goods. They are neither produced nor consumed. That being said, yeah, it's no mystery that low rates have caused asset price inflation, not consumer price inflation.
It's all a matter of technicalities and definitions :) You are consuming housing when you pay rent/mortgage. A house is built, and then its owners consume it in "housing units", or rent those "housing units" to other for consumption. Likewise that ground beef you have in the fridge is an asset - you can sell it to your neighbor at any point before you consume it. Equity is a claim on a company's assets. If General El…
When you pay rent you are consuming housing. When you pay a mortgage it is a financing transaction on the asset. Your consumption cost nets out because you are both paying and receiving rent. Yes all transactions are for either an asset or a good, as Y=C+I...
The commonwealth countries are all facing a property bubble (Canada, New Zealand, Australia, etc). The household debt levels and property prices didn't taper off nearly as much following the 2008 US housing crisis and has pretty much continued unabated: http://www.huffingtonpost.ca/stephen-punwasi/real-estate-bub... Which is fascinating to consider that the Bank of Canada, et al, have let this happen for so long and…
Don't forget that property prices were also inflated by foreign buyers looking for a safe place to put their money outside their governments' reach, and that this practice was encouraged by the outgoing government (probably the current one as well). Also, another issue is that you can cause a housing market crash and financial crisis by abruptly increasing the rate when household debt is at a high.
Housing prices went nuts in Canada because Canadians felt they were being priced out and "real estate always goes up".
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Wages haven't gone up, so while you may have shifted allocation of purchases within the CPI basket, your total spending is probably around the same as it was last year, and the year before that. EG you buy more electronics and gas (cheaper), and less clothing and food (more expensive), but your overall spending remains ~50% of your income, which hasn't changed. Wages are usually the primary driver of higher CPI measu…
> Inflation has occurred outside of CPI basket, most notably in equity markets and real estate prices in large urban cities Those are assets rather than goods. They are neither produced nor consumed. That being said, yeah, it's no mystery that low rates have caused asset price inflation, not consumer price inflation.
And whilst land may not be particularly portable, land ownership is.
Other productive assets: metals, grain, productive plant, etc., may also have financial asset value. Also goods which aren't particularly useful such as fine art.
I'm still learning all the tendencies of these macroeconomic trends... So, this should mean mortgage loan rates, savings account interest rates, and inflation are all now on an upward trend. Right? And thus housing prices should begin to curb, since the cost of loans making buying houses more expensive and less appealing, thus lowering demand. (I've already noticed increasing savings account rates and mortgage rates,…
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I call BS unless you provide proof.
Unless I'm reading the reports wrong, according to the Toronto Real Estate Board (TREB) the average price of a detached housed in the "416" (Toronto) area in July 2017 was $1,304,288. In August it was $1,191,052. So that means a -8.7% change from July to August alone. Numbers for recent months - Detached houses in "416" area code: August: $1,191,052 July: $1,304,288 June: $1,386,524 May: $1,503,868 April: $1,578,542…
We are asking about examples of actual prices of homes going down. They are not the same thing.
The price of homes can actual stay flat or even go up while the average sold price goes down.