A surge of investor money has impacted real estate markets from coast to coast, increasing the risk of a housing bubble in some areas, while looming interest rate hikes could take a bite out of pocketbooks in 2022 whether homeowners know it or not.
Meanwhile, the threat of natural disasters has led risk-averse insurance companies to pull back and forced B.C. homebuyers to carefully consider their options going forward in Livabl’s weekly roundup of Canadian housing news and trends.
Potential housing bust looms largest over Ontario, Quebec: At what point does runaway home pricing lead to a market downturn, and which cities are most at risk? Citing the Bank of Canada’s House Price Exuberance Indicator and recent data showing home purchases by investors have increased 100 per cent during the pandemic, the Financial Post points to Ontario and Quebec as potential housing bust hotspots, with the Hamilton and Montreal markets facing the highest risk of a correction.
Flood risk raising rate of uninsurable homes: The Insurance Bureau of Canada estimates that 10 per cent of Canadian homes face a high risk of flooding, with some situated in areas that could see repeated flooding during the next 20 years. CBC News breaks down how substandard floodplain maps and vague real estate rules hamper homeowners, with six to 10 per cent of homes currently uninsurable and that number expected to rise as climate change causes risk-averse insurance companies to deny coverage.
Survey shows nearly 30 per cent ignorant about interest rates: Rising inflation has increased the likelihood the Bank of Canada will raise interest rates early next year. What impact will that have on households across the country, and do homeowners themselves even know? Illustrating a lack of financial acumen at best and outright naivety at worst, a recent BNN Bloomberg survey found that 29 per cent of Canadian mortgage holders are unclear how higher interest rates could impact their mortgage.
B.C. buyer mindsets reshaped by recent fires and floods: Summer wildfires were followed up by fall flooding in British Columbia, where homeowners have been forced to consider which areas pose the highest risk and how to protect themselves from a potential calamity. The Globe and Mail examines how recent catastrophic events have shifted homebuyer habits and what the future looks like as climate change increases both the likelihood and severity of natural disasters.
New housing data could offer insight for policymakers: According to Statistics Canada, while 73 per cent of Canadians live in owner-occupied dwellings and 42 per cent of those properties are mortgage-free, renters are disproportionately dissatisfied with their housing situation. A Financial Post editorial outlines Canada’s real estate market numbers and why policymakers need to delve into the data and demographics to address issues relating to affordability and adequate housing.
