Seemingly insatiable overseas demand is one of main reasons the gloom-mongers have been wrong
If you’ve been listening to all the warnings from foreign banks about a Canadian house price crash, that sounds smart. But before you congratulate my chum on her forethought, you should know she made that decision several years ago.
- Average house price in Canada up 9.5% to 448, 862
- Ontario house prices may be 25% overvalued, Fitch says
Of course, since then Toronto house prices have only continued their dramatic rise. Although Toronto and Vancouver lead the way with soaring real estate, prices in many other Canadian cities continue to rise.
In the face of a series of recent reports of houses selling for hundreds of thousands of dollars over their asking prices, I thought it a good time to look at why all the gloom-mongers have been wrong, and why they may still be wrong. At least for a while yet.
The question is no small matter for older boomers trying to capture the value of their homes. For most Canadians a home is their single biggest asset.
People heading into retirement could have their plans seriously upset if house prices fell by 63 per cent, as one international bank projectedearlier this year.
On the other hand, if prices continue to rise by nearly 10 per cent a year, as they did this year, it would be difficult for boomers to find a more lucrative, tax-free income on an investment worth up to a million dollars.
Boomers aren’t the only ones watching this market. New buyers would be even worse affected.
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