The Canadian economy tanked in the first quarter, and April\’s data C like basically non-existent growth in consumer spending C don\’t exactly cause you to feel things are getting better anytime soon. Our manufacturers should be picking up the slack developed by low oil prices, there is however little evidence in export or business investment data that Canada\’s non-energy companies are benefiting much from the devalued loonie or are even about to do so. Within the stock markets, we\’re back where we started, using the S&P/TSX Composite coming off a terrible turn last Friday to shut basically flat year-to-date.
Foreign investors in Canada\’s housing market need to be counted, experts say
There is scant data on how many foreign investors are snatching up Canadian homes, and experts the knowledge gap must be filled if policy makers aspire to maintain the stability of the country\’s real estate market.
Foreign investment has become a hot-button issue in Vancouver lately, with many residents blaming demand from offshore clients who are looking for a safe place to stash their money for the city\’s soaring home values.
In short, we appear to be treading water, possibly even sinking slowly, and also the \”insurance\” the Bank of Canada got in January, with a surprise 0.25-basis point rate cut, may not be enough to keep us afloat.
Of course, this might all change because the year stumbles on C something upon which Bank of Canada governor Stephen Poloz and a chorus of optimistic economists seem to be depending. Until then, there are few bright spots in the Canadian economy.
One of these few is real estate. Yes, property C although should you read the headlines, you\’d think soaring home prices, at least in some Canadian cities, are an unmitigated bad, an unsafe situation that\’s establishing millions to lose their shirts. Maybe it is, maybe it\’s not. But that does not change the proven fact that rising asset costs are making a large amount of Canadians richer this season.
Hey, at least something is.
Of course, when the price of an asset goes up, that asset may become harder for individuals to buy. There\’s firm proof of an affordability crunch in Toronto and Vancouver, two cities the Organisation for Economic Co-operation and Development has ranked among the Top 10 most expensive housing markets in the world, based on a measure of median house prices to median household incomes. Other affordability indices tell the same story C costs are rising beyond what many see as Canadians\’ reasonable ability to carry. Plus they just keep on rising.
Surely, something has to be done, the handwringers. The OECD has suggested that rising housing prices are contributing to social inequality. The IMF has warned that we\’re way overvalued. Plus some are more specific. In Vancouver, the mayor has called for a special levy on speculators, aimed at discouraging fluffers-and-flippers inside a city where the average single family home sells for a lot more than $1.1 million.
Again based on the headlines, the focus of much from the angst over rising housing prices is people that \”ain\’t from \’round here\” C that\’s, foreigners, especially Chinese, who\’re sending capital from their own country to the relative safety of Canada. The cheap loonie doesn\’t hurt, either. So maybe we should do something about all this foreign interest in Canadian housing. Some have suggested starting by counting them up and monitoring them, so we can figure out how to stop them from attempting to buy what we have to sell.