Canada Doesn't Have a Housing Shortage: Stats Canada | Canadian real estate news

hey there and welcome back to another Canadian news recap here on Bold Prairie real estate my name is Matthew fight from real estate agent Regina and that's my trust assistant this is a segment we go through the most interesting news articles that I found this past week about the Canadian real estate market and give you my thoughts on it I've been saying for a long time on this channel now that in Canada we don't have enough homes and we don't build enough homes to keep up with population growth and demand while stats Canada is out with a new report and it's been running wild in the news that disagree strongly with that we're also going to be looking at what's going on with rent prices in Canada and where you can buy a house for under two hundred thousand dollars and I've got a few other great articles I think you're gonna like but as always let's start off with another terrible joke what do you call an ancient Egyptian an old Giza if you have a terrible joke that I can use in a future episode put in the comments below let's get into this week's real estate news this first article is looking at housing starts on according to cmhc once again housing starts are down this shouldn't be surprising at all we've seen this now for a couple of months in a row as interest rates go up fewer and fewer developers start building homes this is of course because one of the biggest components to looking at whether a project is gonna get off the ground or not is how much it's going to cost to actually build that project it's a huge part of that performer that those developers are going to do and if they see the cost of boring money continue to increase or it's higher than what they think they can sell these units for after it's all said and done they're just not going to build these homes and we've seen the cost of material Skyrocket now the cost of boring money skyrockets so many projects are just no longer feasible we've seen a large number of projects being put on hold or entirely shelled we have this shortage of houses at least that's what I've been saying of course we're talking about how stats Canada disagrees with that and just just a minute but unless we see the cost of borrowing and the cost of materials decrease or it's subsidized somehow we're going to see fewer and fair homes being built in Canada this next Target is looking at immigration growth in Canon specifically the number of permit resins in the first quarter of this year this was a record 145 000 new permanent residents in just the first quarter of this year that's just the first couple of months here that puts Canada on Pace to welcome 600 000 new permanent residents in the year that would smash last year's record of about 500 000 new Canadians and of course the government had projected around 450 000 for this year that was what they were aiming for prior to 2015 if you look at the previous 20 years prior to that immigration was around 200 to 250 000 new Canadians per year since 2015 that has been ramping up massively and we're seeing especially the last couple of years how much of an impact that has on on the rental market vacancy rates are going down and the cost of rent is going up significantly we're talking the cost rent here in just a second that is also going to have an impact on Canada's real estate market in years to come it's very common that many new Canadians will come to Canada they will rent for three to five years or so till they get established they've got Canadian credit and then often they're looking to purchase so right now we're seeing this immigration surge putting a pressure on the rental market and that will start putting pressure on the resale the purchase Market in coming years as these new Canadians get established and look to buy their first home and make Canada that permanent home that they've been looking for the big shock announcement last week was the bank Canada raising interest rates this of course was big news last week and it was something I should have talked about in a news recap last week but I didn't get a video last week because of an absolutely Swampers I'm a little behind him sorry guys trying to catch up here but this was something that for the most part took the market by surprise a lot of people were expecting rate increases in jail lie not here in June if you look at the way the bond market reacted that was definitely something that they didn't expect there and the vast majority of experts were not expecting rate increases I'd put up a poll about a week before this as I always do before these rate announcements and about 25 percent of the respondents thought the ban Canada wouldn't raise rates 25 thought they would raise them 25 basis points so for those of you that had that answer you guys absolutely nailed it now a 25 basis point hike in itself doesn't have a significant material impact on the resale Market or on the residential real estate market in Canada but it has a significant psychological impact especially when you combine that with the Banky Canada essentially come out saying that they're going to start raising rates or continue to raise rates some more this has a significant psychological impact on the market we saw this last year when the bank has started raising rates right away a lot of buyers got spooked and sat on the sideline of course huge drop in sales we saw prices drop as well with that actually it was Bank of Montreal put out a recent survey where something like 70 percent of those looking to buy a house in Canada were putting their plans on hold waiting for interest rates to come down and that was before this rate hike was announced and I expect that this is going to put some more buyers on the sidelines because they're going to be spooked and saying I'm going to hold off here a little bit and see what's happening we saw this last year and then as a band could have started slowing down those rate increases then ultimately pause them for a while we saw a lot of buyers come back to the market a lot of home sales happen in that time I wouldn't be surprised if something similar like that repeats itself this next articleer here is Canada's Financial regulator as fee firing basically a warning shot at Banks so this is Canada's Financial their mortgage regulator essentially telling the banks deal with extended amortizations and specifically those are of course on static variables that have seen their effective amortization extend out to 30 40 years this has been something that I think has been really poorly reported in the media and online a lot of people saying every has 30 and 40 year mortgages in Canada no that's not the case at all if you go to buy a house in Canada you get a mortgage you will not have the option for a 30 40 year well technically 30 year March but a 40 plus year mortgage if you put down less than 20 percent your only option or longest option is 25 years if you put down 20 or more you can extend to a 30-year mortgage that's the rules say nobody's getting a mortgage a new mortgage day of 40 years what we are seeing though is those on static variables that is those variable mortgage holders that have a monthly payment that doesn't change just the percentage of the principal versus interest fluctuates with interest rate changes and now that we've seen interest rates go up significantly in many cases the static variables now are entirely interest or in some cases more interest in the total monthly payment so what's happening is that effective amortization because they're adding essentially debt onto the mortgage is getting extended out so effective amortization though is very different than contract amortization so when rates go up these payments don't change that means less going to principal more going to interest so effectively it's going to take them longer to pay that mortgage off the same happens in Reverse when interest rates go down what happens though is when these mortgage holders go to renew their mortgage they must reset back to the original contracted amortization schedule so at the end of the day they still have to pay these mortgages off over that contract period so 25 or 30 years they have a choice that they're going to have to make when they come up for New they have to make a lump sum payment to catch back up or they're hoping that interest rates come down so they can catch back up just because interest rates have gone down and that is why I think osfi is trying to get on the banks right now because because this is a problem that is brewing it's going to be a few years before we see this in the market but if we have a situation where interest rates don't come down and these homeowners aren't able to make lump sum payments they're going to be in a lot of trouble and that's why I think osvy is pushing the banks to deal with this I have a little bit of a hunch no inside knowledge that you may see some regulatory changes put forward by osvi specifically to handle this whether they're saying this can't happen in the future or they come down very heavy-handedly and make the banks get these in line much quicker now we've got the monthly rentals.ca rent report year over year nationally rent is up six and a half percent I'll link this article along with all the other ones in the description below so you can dig through it yourself two thousand dollars a month that is the average combined monthly rent we'll break it out by different subtypes 1900 a month for apartments 2200 a month for condos twenty three hundred dollars a month for townhouses on average now we are seeing the pace of rent increase increases slow down still up six and a half percent year over year but this was the smallest year-over-year increase since December of 2021. now when I was digging through this it was interesting looking to chart there are more cities than I saw the previous month with negative year-over-year so Praises declined and one of the notables was correct City that saw a negative nine percent for two-bedroom condos two-bedroom apartments in Quebec City on the flip side Red Deer Alberta saw a 25 increase in monthly rent the Calgary rent prices those have continued to climb up and then of course is having Calgary climb up that ladder of becoming more and more expensive of a place to rent Calgary for a long time had been considered pretty affordable and they're climbing that ladder becoming less affordable but across the board it continues to be more and more expensive to rent a home in Canada this was a great article from 0.2 homes where can you find houses for under two hundred thousand dollars now they ranked here 50 cities the 35 most expensive are all in Ontario and BC and none of them had homes where they were showing for sale under 200 000 at the time that point to homes went through and looked at this of the remaining 15 cities that had homes that were for sale below 200 000 it was less than one percent of all homes of all available for sale now if you look at places with the highest share of homes under 200 000 for sale Cape Brett New Brunswick leads the charge at 45 percent then you've got St John's New Brunswick St John New Brunswick sorry Rhode Island Saskatchewan Winnipeg Edmonton Saskatoon and a few others I did a quick search here just for Regina and Saskatoon thirty percent of all homes available in Regina were priced under 200 000 and 16 respectively in Saskatoon it's been a case for a long time now though that if you're looking for cheaper more affordable places to buy house in Canada the praise the Marine times of where you find that I'm slowly working on a video right now comparing average household income to home prices to find the most affordable places to buy a house in Canada so make sure you get subscribed so you don't miss that video and if you are thinking about buying a house and you need a great real estate agent in the description of this video along with all the sources for this material is a link to my calendar where you can book me in for a buyer's consultation I'll figure out what you're looking for what you're looking for in a real estate agent and get you set up with the best agent in your market now we come to the article where stats Canada says that housing stock grew more than population this is something I'm seeing published all over the place whether it's on Twitter or on the internet people are saying see it is not a supply problem in Canada it's those greedy speculators and landlords buying up all the inventories so regular people can't buy houses now of course if you go through and read this report and not just read the headlines or the Articles talking about the report there's a whole lot of very important information and contacts first off this only covers 2019 to 2021 that's a very small number of years and it's some very important years but let's go through kind of the headline stats here so they show that population in Toronto increased 1.3 percent while housing stock increased 3.5 percent in Vancouver 2.1 percent population increase and a 3.6 increase in the housing stock of course again three very small year or three years in particular here that are very important the report also specifically says it did not look into whether there was a pre-existing shortage of homes in Canada or not so even if we were short millions of men's homes which cmhc has been saying for a while now this report didn't look into that and because it's 2019 to 2021 that's important because of course 2020 and 2021 are two years that we saw some of the smallest population increases in Canada because of course course of the pandemic 2020 virtually no population increase and 2021 saw a very small population increase in Canada of course in those two cities when it comes to Building Homes these are planned out years in advance five or ten years prior to when people can actually take possession of these homes so these projects that were finished in this 2019 to 2021 that increased the housing stock were planned years before this they were not accounting for those two years that we saw a drop off in population increase of course now 2022 and looking like 2023 we're seeing record immigration levels that's going to pull a lot of strain on it so yes specifically these three years we saw housing stock increase faster than population but this is really the anomaly not the norm here so you may see this put out there see proof housing stock is definitely increasing faster than demand it's not and that's why we're seeing all over the place articles singing exactly opposite this one just grabbed the headlines because they used some very specific gears and it's been going like wildfire right now now you should go check out this right here which is my most recent monthly King real estate market update in this past month I actually took up the 2020 data because of how much it skewed the results for the five year average and it's really interesting to see what happened there if you love this video please give this video a like for me help spread this video Hit subscribe if you love to learn about Canadian real estate leave some comments below so we can discuss things in the comments section below and as always thank you guys very much for watching

Channel: Bald Prairie Real Estate

Views: 4,252

Keywords: canada housing shortage, canada housing market, housing crisis, canada real estate, real estate canada, bank of canada, canada housing crisis, canada housing market news, real estate news, canadian housing market, canadian real estate, canada housing, Canadian real estate news, bald prairie real estate, canadian real estate news, canadian home prices, canadian, real estate, canada, canada housing market 2023, mortgage rates canada, variable rate mortgage, rent

Id: cKYv7NphVZY

Length: 14min 23sec (863 seconds)

Published: Fri Jun 16 2023