Discussion around Real Estate Bubbles for places like Vancouver and Toronto have been had en masse for so many years now, and there’s a lot of legitimacy to suggesting that real estate markets in big cities have the bulk of homes on those markets being overvalued. Whether or not the bubble is soon to pop – as many have suggested and some even hoped for – isn’t such a sure thing. When demand outstrips supply so emphatically those bubbles tend to be fairly darn durable and can expand much more than you’d think possible.
A recent report from a Swiss Bank has pointed to Toronto as the 2nd biggest real estate bubble in the world though. Naturally, this is the sort of stuff that grabs our attention and real estate agents working in Canada’s largest and most populous city may well want to take note of it too. Working in real estate often means having to roll with the punches, as the expression goes, and when it comes to a market with overvalued homes there may be something of a belief in getting while the getting is good. Easier said than done if you’re new to the business.
Bringing new clients into the fold can be a challenge for these realtors, but our online real estate lead generation system here at Real Estate Leads is a powerful ally to have on your side when it comes to that. Backed by solid Internet Marketing Principles, what it does is identify people who are planning to either buy or sell a home. When they volunteer contact details, those details go to the realtor and he or she has the opportunity to be first in touch with these prospective clients.
Back to our topic though, and let’s have a look at why this report showed that Toronto has the world’s 2nd biggest real estate bubble.
Correction Coming?
Vancouver made the top 10 in the list put out by Swiss Bank UBS as part of their yearly ‘Bubble Index’, and that’s not a surprise either. Those who don’t share the beliefs of a ‘pop’ being on its way eventually point to the same argument, and it’s a very valid one – as long as there’s not enough in the way of new home builds and existing homes coming onto the market, the values are going to be fairly well protected and the status quo isn’t going to change by and large.
What is this UBS Global Real Estate Bubble Index? It is a yearly report that analyses residential property prices in 25 of the world’s major cities. It starts with the basis that a bubble can only be proved to exist after it has popped and they do make quite clear that they cannot claim any knowledge of when such a correction could come. The aim is more to track the factors that most indicate a possible bubble and the ones that make a city more at risk of this.
No one’s debating that the lack of affordability for homes in both cities is worsening the problem. There’s also the way rapid growth in housing prices have contributed to the high scores of cities around the world. Toronto came 3rd in this last year, and came in second the year before that. Vancouver has gone as high as 4th place.
Pop Unlikely
Nothing is going to change the belief of people with informed opinions who will insist that neither of these bubbles are popping, and there’s a whole lot to support that way of thinking. The warning signs should still be heeded, and particularly by the municipalities in both the GTA and GVA as to what they will do to improve housing affordability in Canada and see to it that supply does a better job of meeting the ever-growing demand.
It is true that the International Money Fund reported on the high possibility of a major price correction, and Canada’s home prices are rising faster than any other G7 country according to the US Federal Reserve. We also have the Canadian Mortgage and Housing Corporation listing most major cities in Canada as being at risk for major market vulnerability.
Even if there is a correction, it will likely be a very minor one and if that’s the case it might actually serve the purpose of meeting the two interests in the middle. Current homeowners shouldn’t be too disappointed with dropping values, and those looking to buy a home may find them at least somewhat more affordable.
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Discussion around Real Estate Bubbles for places like Vancouver and Toronto have been had en masse for so many years now, and there’s a lot of legitimacy to suggesting that real estate markets in big cities have the bulk of homes on those markets being overvalued. Whether or not the bubble is soon to pop – as many have suggested and some even hoped for – isn’t such a sure thing. When demand outstrips supply so emphatically those bubbles tend to be fairly darn durable and can expand much more than you’d think possible.
A recent report from a Swiss Bank has pointed to Toronto as the 2nd biggest real estate bubble in the world though. Naturally, this is the sort of stuff that grabs our attention and real estate agents working in Canada’s largest and most populous city may well want to take note of it too. Working in real estate often means having to roll with the punches, as the expression goes, and when it comes to a market with overvalued homes there may be something of a belief in getting while the getting is good. Easier said than done if you’re new to the business.
Bringing new clients into the fold can be a challenge for these realtors, but our online real estate lead generation system here at Real Estate Leads is a powerful ally to have on your side when it comes to that. Backed by solid Internet Marketing Principles, what it does is identify people who are planning to either buy or sell a home. When they volunteer contact details, those details go to the realtor and he or she has the opportunity to be first in touch with these prospective clients.
Back to our topic though, and let’s have a look at why this report showed that Toronto has the world’s 2nd biggest real estate bubble.
Correction Coming?
Vancouver made the top 10 in the list put out by Swiss Bank UBS as part of their yearly ‘Bubble Index’, and that’s not a surprise either. Those who don’t share the beliefs of a ‘pop’ being on its way eventually point to the same argument, and it’s a very valid one – as long as there’s not enough in the way of new home builds and existing homes coming onto the market, the values are going to be fairly well protected and the status quo isn’t going to change by and large.
What is this UBS Global Real Estate Bubble Index? It is a yearly report that analyses residential property prices in 25 of the world’s major cities. It starts with the basis that a bubble can only be proved to exist after it has popped and they do make quite clear that they cannot claim any knowledge of when such a correction could come. The aim is more to track the factors that most indicate a possible bubble and the ones that make a city more at risk of this.
No one’s debating that the lack of affordability for homes in both cities is worsening the problem. There’s also the way rapid growth in housing prices have contributed to the high scores of cities around the world. Toronto came 3rd in this last year, and came in second the year before that. Vancouver has gone as high as 4th place.
Pop Unlikely
Nothing is going to change the belief of people with informed opinions who will insist that neither of these bubbles are popping, and there’s a whole lot to support that way of thinking. The warning signs should still be heeded, and particularly by the municipalities in both the GTA and GVA as to what they will do to improve housing affordability in Canada and see to it that supply does a better job of meeting the ever-growing demand.
It is true that the International Money Fund reported on the high possibility of a major price correction, and Canada’s home prices are rising faster than any other G7 country according to the US Federal Reserve. We also have the Canadian Mortgage and Housing Corporation listing most major cities in Canada as being at risk for major market vulnerability.
Even if there is a correction, it will likely be a very minor one and if that’s the case it might actually serve the purpose of meeting the two interests in the middle. Current homeowners shouldn’t be too disappointed with dropping values, and those looking to buy a home may find them at least somewhat more affordable.
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