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Thursday , 1 September 2016

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News with a focus on real estate, finance and the marketplace

New Real Estate Sector debuts on world stock exchanges tomorrow

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As of tomorrow, real estate companies, which are currently listed on stock exchanges under the Financials Sector, will have their own Real Estate Sector. The real estate sector now has market capitalization of $1.48 trillion, according to the Wall Street Journal, and accounts for 3.5 per cent of the global equities market. Also, Real Estate Investment Trusts (REITs) have been among the top-performing asset classes for more than twenty years, with an average return of 12 per cent compared to 9 per cent for the S&P 500. Many real estate industry insiders believe the move will bring real estate into sharper focus for investors, with more money flowing in. The ... Read More »

Sustained soft landing for Vancouver, Toronto, if bond yields rise: TD

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Despite numerous predictions to the contrary, there has been no “soft landing” in Canada’s housing market. Rather, “runaway” price growth in Vancouver and Toronto have dominated the discussion, and will continue to do so, according to a regional housing report from TD Economics. But TD is still betting that the soft landing will occur in both Toronto and Vancouver—if a certain number of conditions are met, including rising government bond yields, higher mortgage interest rates and new mortgage lending regulations coming into effect next year. The paths taken by the two cities will be different, however. TD predicts that home prices in Vancouver will drop by 10 per cent by ... Read More »

Toronto realtors: condo demand outpaces supply, foreign investors playing bigger role in market

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Several Toronto realtors have weighed in with their thoughts on the city’s real estate scene, releasing statements in which they give their perspective on the strong sales, high prices and the apparently insatiable demand for housing in this city. They all agree that foreign buyers are having a greater impact on the market than ever before. One realtor, who describes himself as a condo specialist, released a statement in which he drew a direct link between the 15 per cent tax imposed on foreign buyers in Vancouver and the Toronto condo market. The tax, which took effect on August 2, caused an immediate “chill” in real estate sales in Vancouver, ... Read More »

Except in Toronto and Vancouver, home affordability near normal in Canada

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Rapidly escalating homeownership costs in Vancouver and Toronto caused the highest quarterly jump in the national affordability index in six years, says RBC in its second quarter Housing Trends and Affordability Report. Even though affordability was close to historical norms in most of the country, even improving in a couple of cities, those two hotspots pushed the affordability measure up by 1.2 per cent to 42.8 per cent. This is the percentage of pre-tax household income that would be required to own a home, including mortgage payments, taxes, utilities. Vancouver’s, and “to a lesser extent” Toronto’s soaring prices fuel “genuine concerns” about overheating in these markets, says RBC. Vancouver stands ... Read More »

Second quarter “steady” but future uncertain for economy: CMHC

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The national housing agency, Canada Mortgage and Housing Corporation (CMHC), earned a profit of $338 million in the second quarter of 2016, its second lowest in the last eight quarters. CMHC attributes the drop in revenues to lower parliamentary spending on housing programs, which fell by $17 million in the quarter. The agency continues to reduce its exposure to the housing market, decreasing its total mortgage insurance business by $3 billion in the second quarter. The insurance-in-force now stands at $523 billion; the legislated limit is $600 billion. Despite that drop, the agency says it provided residential mortgage insurance for 11.2 per cent more units (134,891) than in the same ... Read More »

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