TechnologyCanadian housing slump deepens with first drop in values in decades
Canadian House Prices To Drop As 'Huge' Wave Of New Homes Arrives: Report
The slowdown in Canada's housing market will get worse before it gets any better, a new analysis predicts, because the country is about to be flooded with a "huge amount" of new homes.
(Bloomberg) -- Canadian home values fell last year for the first time in three decades amid falling prices in some of the country’s priciest markets, even as debt burdens increased.
The value of residential real estate in Canada held by households dropped C$30 billion ($22.5 billion) in the fourth quarter to C$5.10 trillion, from C$5.13 trillion in the same quarter the previous year, Statistics Canada reported Thursday. The 0.6 percent decline is the first decrease in country-wide home values in data going back to 1990.
Households meanwhile saw their debt burdens rise at the end of last year, with the debt to disposable income ratio hitting a record 174 percent in the fourth quarter. The worsening reflects a sharp slowdown in economic growth at the end of last year.
Former mayor Hazel McCallion, 97, to become special adviser to Ford government
Ontario Premier Doug Ford has appointed Hazel McCallion, the 97-year-old former mayor of Mississauga, Ont., as a special adviser. Along with the premier, McCallion will advise the province's minister of municipal affairs and housing, netting up to $150,000 per year. McCallion served three decades as mayor, during which she was affectionately dubbed "Hurricane Hazel" by supporters and some much more "uncomplimentary" things as well, in her words, including "The Queen of Sprawl." During her term, Mississauga grew to become the sixth largest muncipality in the country, says the announcement.
Canadians are also spending a larger proportion of their income on servicing that debt. The debt service ratio -- the proportion of a household’s income that goes to paying off principal and interest on debt -- rose to 14.9 percent in the quarter, the highest level since the fourth quarter of 2007.
Debt-to-disposable income should plateau moving forward, Priscilla Thiagamoorthy, an economic analyst at BMO Capital Markets, said by phone.
“Credit growth is slowing so as a result of that, we should expect to see maybe steady or lower debt ratios going forward, especially because of a cooler housing market and a slowdown in consumer spending,” Thiagamoorthy said.
In a separate report, the agency said new home prices fell 0.1 percent in January from a year earlier -- the first decline since 2009. While the index doesn’t include condominiums, the weakness was driven by declines in the Toronto and Vancouver regions, which fell 1.5 percent and 0.3 percent respectively.
Singh unveils affordable housing proposals
OTTAWA - Jagmeet Singh is proposing three measures he says will help build 500,000 new affordable housing units across Canada over the next 10 years. The NDP leader says the federal government should stop applying GST to the cost of building new affordable units. It should also provide a subsidy to renters who spend more than 30 per cent of their income on housing. And Singh says it should double the first-time home buyers' tax credit to $1,500 from $750. For now, details of the three measures are scant. Singh says they're part of a broader NDP housing plan which will be released later. Singh is running in a Feb.
(Updates with quotes. An earlier version corrected the percent decline in the 2nd paragraph.)
--With assistance from Natalie Wong.
To contact the reporter on this story: Erik Hertzberg in Ottawa at [email protected]
To contact the editors responsible for this story: Theophilos Argitis at [email protected], Stephen Wicary
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Average Canadian house price fell 5.5% in the past year, Realtor group says.
The average price of a Canadian home has fallen by 5.5 per cent to $455,000 over the past 12 months, the Canadian Real Estate Association said Friday. The group that represents 125,000 Realtors across the country says sales were higher in January than in December, but they were still below the level seen in January 2018 — a month that CREA at the time said was historically bad for the housing market because of new stress-test rules that had just been implemented. © Scott Galley/CBC Prices and sales were lower compared to last year.
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