This week’s news: BMO says Toronto housing market in a bubble

Toronto Real Estate - Toronto housing market bubble
Bank of Montreal’s chief economist Douglas Porter believes Toronto is currently in a housing bubble.

Our weekly round-up of real estate news in Toronto, across Canada and the world for the week ending February 17, 2017.

 

Toronto

‘Too hot for comfort’: BMO says Toronto housing market in a bubble (CTV News)

Toronto’s hot real estate market is in a housing bubble according to the Bank of Montreal’s chief economist Douglas Porter.

The economist loosely defined the term bubble in a note to clients on Wednesday.

“It’s when prices become dangerously detached from economic fundamentals and start rising strongly simply because people believe they will keep rising strongly, encouraging more buying,” Porter wrote.

Here are 3 different futures for King Street (CBC)

Toronto city staff are looking for feedback from the public Monday evening on three proposals for the re-design of King Street in a pilot project that will see an overhaul of the arterial road from Bathurst Street to Jarvis or Parliament Streets.

All three designs focus on transit, dedicating lanes of traffic to streetcar flow. “The overall objective here is to prioritize the transit movement,” said Jennifer Keesmaat, the city’s chief planner.

Why renting makes more sense than buying in Toronto’s real estate market (Now Toronto)

I’m sure many of us grew up with the mentality that buying is always the best option when moving out on your own. The argument has remained consistent: renting means throwing away money, while purchasing is investing.

In Toronto’s real estate market, people often assume the value of their houses and condos will inevitably go up in value. Although many factors contribute to the flux and flow of condo prices, including a building’s location, age and condition, the reality is that the value of many condos either remains the same or drops by a small percentage over time. This can make the real estate market a roulette game for aspiring young buyers and first-time home owners.

Canada

Toronto and Hamilton are the hottest real estate markets in Canada (BlogTO)

Toronto’s real estate market can be a pretty scary place. Prices continue to rise, making home ownership a pipe dream for many of those who live in the city. The same holds true for Hamilton, which has witnessed tremendous growth.

The Globe and Mail reports today that according to the Teranet-National Bank House Price Index, which tracks the changes in the residential housing prices over time, prices in Toronto saw a year-over-year increase of nearly 21 per cent. Hamilton was just behind with a 17.6 per cent price jump.

Average Canadian house price barely increased in past 12 months (CBC)

The average price of a Canadian home sold in January was $470,253, just 0.2 per cent more than the same month a year earlier.

The Canadian Real Estate Association reported Wednesday that sales were down by 1.3 per cent during the month, to the second-lowest monthly level since the fall of 2015.

Home sales in B.C. return to ‘historic averages’ says real estate board (Vancouver Sun)

VANCOUVER — The British Columbia Real Estate Association says the province’s housing market has tumbled from record highs posted in 2016 to return to what it calls historic, long-term averages.

The association says 4,487 condos, townhomes and detached homes sold in B.C. in January, down 23 per cent compared with the same period last year.

USA

Can Trump’s immigration rules derail Miami’s real estate market? (Forbes)

Imagine if all of a sudden the spigot of wealthy foreigners and their cash was somehow choked off from South Florida? There is no doubt that the region’s real estate market would crumble.

Miami Worldcenter is a modern, glass and steel superstructure being designed and built by Falcone Group’s Arthur Falcone and Centurion Partners’ Nitin Motwani. The mixed used development project runs several blocks in the Park West neighborhood, not far from downtown.

Homes in these 10 markets are selling like hotcakes (Business Insider)

Housing markets in the western part of the US remain hot. Data released Tuesday by the brokerage firm Zillow showed that eight of the 10 hottest US markets are located west of the Mississippi River, including five in California.

“The overall recovery has been more robust in many coastal markets, especially on the West Coast, with fast home value appreciation, strong job growth, and solid income gains,” Zillow’s chief economist, Dr. Svenja Gudell, said. “Many of these markets are also experiencing above-average housing demand coupled with limited inventory, putting sellers in the driver’s seat.”

Property watch: New York rents are second highest in world (Wall Street Journal)

For renters, New York City isn’t the most expensive place in the world to live, but it is close.

Vail tops list of highest priced locations for ski properties in North America (Forbes)

The highest average sales price for ski properties in North America in 2016 was recorded in the posh ski resort town of Vail, Colorado. That’s according to realtor Engel & Völkers ranking of the top 10 ski destinations in the US and Canada.

The data used in the ranking is based on properties brokered by Engel & Völkers and transactions recorded in each market.

International

New home owners gagged over poor build and compensation claims (The Guardian)

New home owners are being forced to sign gagging orders after making successful claims for compensation about the quality of their new homes.

The Guardian has been made aware of NHBC, the regulator of new homes, issuing gagging orders or so-called non-disclosure agreement that not only restrict the homeowner from contacting the media about the problems with their property but also talking to neighbours in the development.

Weakened sterling sparks Chinese investors’ appetite for London real estate (China Daily)

London’s commercial real estate market has more or less lost its glamour with deals declining since Brexit, but the market can take some comfort in the fact that Chinese investors still find it attractive, the Wall Street Journal reported.

Chinese buyers spent more than three billion pounds ($3.75 billion) on real estate in central London last year, more modest than UK investors but more generous than those from the US or Europe, real estate consultancy firm Jones Lang LaSalle (JLL) said.

Welcome to rabbit-hutch Britain, land of the ever-shrinking home (The Guardian)

Get ready for a new wave of “micro-homes” – tiny flats, often in converted office buildings, that are roughly the size of a typical bedroom yet supposedly big enough for two people to live in.

Such properties are already springing up. Guardian Money tracked down a miniscule, newish studio flat in the centre of Croydon that measures just 14.9 sq m (160 sq ft), even though government guidance states that the minimum floor area for any new home is 37 sq m.

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