Exactly. 3 out of 4 Canadians are in 'normal' housing markets and have nothing of particular concern on the horizon. To frame it as a Canadian issue, where 75% of the population are seemingly unaffected, seems disingenuous. As we see from the average figures, the US market has surpassed (granted, only just) the Canadian market. If the US market is only close to overheating, Canada lags behind that.
What do the numbers on the Y-axis represent? Thousands of dollars? But that doesn't seem right. I don't think you would hear too many complaining about even a $180,000 home. $180,000 in 1975 dollars is $788,000 2016 dollars (or $803k if we use the US rate of inflation), which doesn't add up either. Housing is nowhere near that expensive. You can build a brand new mansion for less than that.
Canada is lagging behind the US in average home price. As shown above, the average US home price is $5,000 more. As you can also see from the links I provided, Canada's housing market grew by 4.3% YoY (May 2016 to May 2017), while the US market grew by 16% in the same period.
The US housing market appears hot, Canada's not so much (outside of Toronto and Vancouver).
The following chart is drawn from the Federal Reserve Bank of Dallas’s International House Price Database. It’s an index (100 = prices in 2005) of real, or inflation-adjusted house prices, and it drives home just how much more inflated Canadian house prices are than at the U.S. bubble’s peak. The chart also includes Japan and its mammoth housing bubble of the 1980s—which is more akin to what’s gone on in Canada.
> Housing is nowhere near that expensive. You can build a brand new mansion for less than that.
I doubt you can build any house, let alone a mansion, anywhere in Canada for that price. At least anywhere a person would want to live. From what I've read, permitting alone would cost that much in Vancouver before you even break ground.
> Canada is lagging behind the US in average home price. As shown above, the average US home price is $5,000 more.
I wonder if this is apples vs apples? Is "home" the same for both? Also, one has to consider earnings - affordability is what really matters (well, to local buyers anyways).
Housing in all of Canada has been in a massive bull market for 20 years with the only noteworthy correction being the short pause after the 2008 crisis. Based on local earnings, a house is going to be historically expensive anywhere, and batshit insane in some places.
> I doubt you can build any house, let alone a mansion, anywhere in Canada for that price.
For $800k? What are you spending your money on? A modest home should be nowhere near that much, at least where the majority of Canadians live.
> At least anywhere a person would want to live. From what I've read, permitting alone would cost that much in Vancouver before you even break ground.
The vast majority of Canadians do not live in Vancouver. Nor do they live in Toronto.
The fastest growing community in Canada is Warman, SK[1], with 55% growth from 2011-2016. If that impressive influx of people doesn't indicate desire to live in the location, I don't know what does. I'll grant you that mansion is subjective, and it is difficult to link to something that hasn't been built yet, but here is a recently built large (2800 sq. feet), stylish home in the region listed at under $800k[2].
> Housing in all of Canada has been in a massive bull market for 20 years with the only noteworthy correction being the short pause after the 2008 crisis.
Are you still conflating the Canadian housing market with the Toronto and Vancouver housing markets? There are several provinces where the average home price is in decline.
> Are you still conflating the Canadian housing market with the Toronto and Vancouver housing markets? There are several provinces where the average home price is in decline.
These discussions are ridiculous. Other than a few isolated places, housing across all of Canada has been going up substantially for well over a decade. That the entire country has not gone parabolic like Toronto and Vancouver does not mean it is not outpacing inflation substantially.
Continue to deliberately misunderstand at your leisure.
> Other than a few isolated places, housing across all of Canada has been going up substantially for well over a decade.
The average Canadian home price in 2005 was about $250,000 CAD. The average home price today, excluding Toronto and Vancouver, is about $300,000 CAD (in 2005 dollars). That is 1.6% average growth per annum.
1.6% real growth is substantial? It is not nothing, but I think you're being a tad overdramatic. If any other asset class only returned a measly 1.6%, we'd call that disappointing.
The story is, of course, quite a bit different once you include Toronto and Vancouver. But that's been the entire discussion up to this point, so I'm sure I don't need to reiterate that yet again.
Average national home price as reported by CREA. And, as we already discussed, real growth from May 2016 to May 2017 was just 2% including Vancouver and Toronto. Several provinces are seeing real decline in home prices. I'm not seeing where this substantial growth across the entire country is hiding...?
"While that might put peak price growth behind us, the question is how much the market will cool from the unsustainable 30-per-cent-plus pace, and how long the adjustment will persist,” he said in a statement."
How the country is growing 2% overall when the most populous region by far grew at 30% last year, and nowhere noteworthy is going down. 6.5M/36M x .3 = 5.4% national growth just from the GTA. We also have no inflation in Canada despite housing affordability being a major issue.
What 30% pace? Real growth has been 1.6% per annum. Now I'm absolutely certain you are confusing Toronto with the rest of Canada. The vast majority of Canadians don't live in Toronto. It is not representative of anything related to Canada as a whole.
> How the country is growing 2% overall when the most populous region by far grew at 30% last year
You're going to have to ask CREA, the official source for home prices in Canada. That is what they have reported. I can only go by what they have given.
If we can believe Zolo, who isn't exactly official but provides more comprehensive data: Toronto has declined by almost 8% in the last quarter and is barely up at all over the past year. Are you sure about this 30% YoY? Perhaps you're looking at the wrong period?
Agreed. The Canadian market has a few hot spots where a small minority of the population live, but much like NYC and SF do not represent the US, Toronto and Vancouver do not represent Canada. Overall there does not seem to be much issue in the housing market on either side of the border.
