A growing number of economists are now predicting a bubble that will burst... Too much supply in Edmonton's construction sector?... Similarities between the housing market in Canada and that of Australia... Canada’s most expensive condo...
Bursting bubble predicted by more economists
We’ve been hearing it for a while, it’s been denied by officials and ignored by many homeowners…. but a growing number of economists are now predicting a bubble that will burst. A poll of analysts by Reuters has revealed that more of them now believe that we will see a sharp correction in the market; but not yet. To be fair, the majority of the 20 polled did not believe that the chance of a correction had increased in the last 12 months. What they are predicting is an interest rate rise in 2015, but house prices to continue rising through into 2016 before seeing decline in 2017. However, most of them have forecast that it will be a cooling rather than a crash. Read the full story.
Are we building too much?
There are fears in Edmonton that there may be too much supply in the construction sector, especially in commercial property. At the centre of the discussions is the newly-announced Stantec Tower, a 62 storey building housing 320 residential units together with 26 floors of offices. Much of the office space will be taken by the professional services company that gives the tower its name but they will be relocating staff from four other buildings in the city and a further project will pull in municipal staff from multiple locations to a single one. That leaves potential vacancies in the offices they leave, which may or may not be taken up by other businesses. The other issue is parking, with many of the surface lots being replaced (eventually) by more expensive underground facilities. There is also a lot of condo development in Edmonton with some major projects underway, although figures show that building levels have fallen year-over-year and there is still plenty of demand. Read the full story.
Australia has the kind of data we could use
There are many similarities between the housing market in Canada and that of Australia; low interest rates, affordability issues, overvaluation and foreign investment. One big difference is the availability of data, particularly that relating to foreign ownership. Australia has data on the levels of overseas investors and as such it clamped down on that investment four years ago; foreigners can now only invest in new developments. Experts say we desperately need to have that kind of data here. Vancouver is the world’s second most expensive housing market, despite average income in the city being lower than the national average. The perception is that foreign ownership is pricing locals out of the market and some predictions suggest as much as 50 per cent of the downtown condos are foreign-owned. But we don’t know for sure, because we don’t have the stats. Read the full story.
Canada’s most expensive condo
Imagine arranging the mortgage on this one, a $33 million condo in the Toronto Trump hotel. The three storey building, 58 floors up boasts panoramic views of the city with 11,755 square feet inside and a further 2,091 wrap-around terrace. The penthouse has a dramatic glass atrium but there is still much being left to the potential buyer’s imagination as flooring and decoration have not been completed, to allow the new owner to add their personal touches. If $33 million is out of your price range, you could for now rent it at the modest cost of $10,000 per day. Read the full story.
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