Canada’s federal banking regulator is forecasting a significant drop in housing prices as the Bank of Canada prepares to raise interest rates. Meanwhile, the federal government has been investigating links between inflation and housing.
A new report finds that property estimates of more than 1.3 million vacant homes may have been greatly exaggerated. We also look at Airbnb’s impact on renters and the rise of crypto mortgages in Livabl’s weekly roundup of Canadian housing news and trends.
Canadian housing prices could plunge 20 per cent: Canada’s housing market finds itself in the late stages of a “speculative fever,” says Peter Routledge, head of the Office of the Superintendent of Financial Institutions, who warns prices could drop by up to 20 per cent in some markets after the Bank of Canada raises its benchmark lending rate.
The Financial Post looks at the “perfect storm,” outlined by Routledge, who notes that investors increased their share of the market and a herd mentality took effect as prices began rising during the pandemic.
Is inflation or low supply driving housing prices?: After inflation recently hit a 30-year high of 4.8 per cent, the House of Commons launched a special parliamentary committee to identify its effects on the Canadian economy.
The first round of meetings focused on housing, and CBC News digs into the political squabble as government officials try to determine whether a “housing inflation crisis,” is to blame for sky-high prices. Some industry experts are claiming the wheels have been in motion for decades due to a lack of new construction.
Does Canada truly have more than 1.3 million vacant homes?: Canada’s housing affordability issues have been exacerbated by more than 1.3 million homes — roughly eight per cent of the nation’s housing stock — sitting vacant, according to a report by the Organisation of Economic Co-operation and Development (OECD). The report made vacant homes the subject of debate and possible taxation.
However, the Financial Post notes that vacancy data has been misinterpreted, and the actual number of empty dwellings is much lower, particularly in high-demand urban areas.
Vancouver legal fight could unveil Airbnb’s impact on rental market: Are short-term rental services like Airbnb impacting renters by limiting supply and driving up prices? That’s one of the questions that could be answered through an ongoing Vancouver legal battle, providing information on how many units used to have full-time tenants before transitioning to short-term rentals.
The Toronto Star examines the legal wranglings, and whether they could expose renters who are providing year-round suites rather than spare rooms or vacation-vacated residences.
Cryptocurrency mortgages turning Bitcoin into collateral: Milo, a Miami-based lending company, recently announced that it will start providing crypto mortgages, letting homebuyers lay down their Bitcoin as collateral to secure a home loan. How does crypto’s volatility stand up against real estate’s stability, and will these mortgages eventually make their way to Canada?
The Financial Post details some of the issues, including how Canada’s appetite for crypto differs from the U.S., and why a “seismic shift,” might have to occur to bring the practice north of the border.
