Talk about varying opinions. The Globe and Mail’s real estate reporter Tamsin McMahon analyses seven ways the Canadian housing market is measured – and explains why some assessments are better than others.
“Is Canada’s housing market in a bubble? The question has lingered for years – ever since national home prices managed to defy a global real-estate correction. Observers, both domestic and foreign, continue to issue dire pronouncements about the health of the Canadian housing market. But those predictions vary wildly, with some saying the market is overvalued by as much as 60 per cent, while others say it could be undervalued by almost 10 per cent.
Of course, examining the housing market is a fuzzy science. Every analysis uses its own idea of how to measure the “fair value” of real estate. Some compare home prices to incomes, while others look at interest rates or population growth. One analysis even compares house prices to the value of Canadian exports.
Deutsche Bank
Analysis: Housing market is overvalued by 60 per cent
Most recent date measured: fourth quarter of 2014
Bank of Canada
Analysis: Housing market is overvalued by about 20 per cent
Most recent date measured: third quarter of 2014
Fitch Ratings
Analysis: Housing market is overvalued by about 24 per cent
When: Second quarter of 2014
International Monetary Fund
Analysis: Housing market is overvalued by about 11 per cent
When: last quarter of 2014
Toronto-Dominion Bank
Analysis: Housing market is overvalued by about 11 per cent
When: last quarter of 2014
Canada Mortgage and Housing Corporation
Analysis: Housing market is moderately overvalued, by about 3 per cent
When: second quarter of 2014
Canadian housing market economist Will Dunning
Analysis: Housing market is undervalued by about 9 per cent
When: report published last March”
Read the entire article and see the interactive graphs.
Be in the know! For helpful information on the housing market and mortgage financing insight, talk to Tracy Irwin today.
Did You Know?
Tracy Irwin was recently nominated for a Women of Inspiration Award. We likely all know of a woman who has made great strides in building her business and who also quietly goes about her way helping and supporting others. She is a role model for us all.
Company of Women honours everyday women who have shown extraordinary compassion for others; those who’ve gone that extra mile in their business and in life.
Guiding principles:
- Shown courage in her life and business to get to where she is today
- Gone the extra mile in offering her program/services/product
- Given back through her volunteer work and/or mentoring and supporting others
Congratulations Tracy! You are the epitome of a Woman of Inspiration!
