Statistics Canada has released its latest crop of 2016 Census findings<\/a>, with new revelations about national homeownership.<\/p>\n The data delves into the rate of homeownership over the past two decades, the emergence of certain housing types, regional variances and affordability, as well as how today\u2019s generation of home buyers differ from those past.<\/p>\n One of the main findings is that millennials are less of a driving force in the market compared to their boomer counterparts, with just 50.2 per cent of 2016\u2019s 30 year-olds owning their home, compared to 55 per cent in 1981.<\/p>\n It also shows boomers are mainly responsible for a surge in home buying between 1991 and 2006, and with the rate of homeownership levelling off following that year. Nationally, the rate of homeownership is 67.8 per cent, down slightly from 69 per cent in 2011 and from 68.4 per cent in 2006. However, that rate exploded from 62.6 to 68.4 per cent between that year and 1991, indicating boomers\u2019 real estate purchasing activity.<\/p>\n That today\u2019s home purchasers are more subdued has a lot to do with affordability, especially in Canada\u2019s largest cities. For example, in the Greater Toronto Area, the average home cost $775,546 in September<\/a> of this year, compared to $349,142 in September 2006 \u2013 a 122-per-cent increase that far outstrips that of wage growth.<\/p>\n Decreased detached house affordability is also the catalyst behind growing condo ownership \u2013 StatsCan finds 13.3 per cent of households (1.9 million) currently live in condos, an increase of 1.2 per cent from 2011. Of those, 67 per cent (1.3 million) owned their units, while 32.9 per cent, (616,570) rent.<\/p>\n Vancouver is home to the largest number of condo dwellers at 30.6 per cent, followed by Calgary (21.8 per cent), and 20.9 per cent of Toronto residents.<\/p>\n Interestingly, the percentage of households who found homeownership to be \u201cunaffordable\u201d \u2013 which is classified as paying more than 30 per cent of income on shelter costs \u2013 fell slightly to 24.1 per cent, from 24.4 per cent in 2006.<\/p>\n The Census also reports home values are up across the country, at an average of $443,058 compared to $344,182 in 2011.<\/p>\n There will be no change to the variable cost of borrowing this month, as Canada’s central bank has opted to take a wait-and-see approach to its trend-setting interest rate, leaving it untouched at 1 per cent<\/a>. This is an abrupt change in stance from last month, when the majority of economists expected another rate hike, to follow upward action in September and July.<\/p>\n However, weaker-than-expected job numbers and uncertainty over NAFTA have persuaded the BoC to back off their hawkish approach.<\/p>\n It also stated that new mortgage rules that will make qualification tougher for new applicants, will cool housing market activity, a main contributor to the economy.<\/p>\n \u201cHousing and consumption are forecast to slow in light of policy changes affecting housing markets and higher interest rates,\u201d states the BoC in their release. \u201cBecause of high debt levels, household spending is likely more sensitive to interest rates than in the past.\u201d<\/p>\n The Canada Mortgage and Housing Corporation, which monitors the housing market and mortgage holder debt levels, released its latest Housing Market Assessment and Housing Market Outlooks<\/a> this week, with some dire warnings for the nation’s biggest cities.<\/p>\n Toronto, Hamilton, Vancouver, Victoria, and Saskatoon have all been identified as “highly vulnerable” due to price overvaluation, acceleration, and overheating. Calgary, Edmonton, and St. John’s also received warning bells for overbuilt conditions, as there isn’t enough buyer demand to justify\u00a0the pace of new home development in those CMAs.<\/p>\n “We continue to see a high degree of vulnerability in Canada;s housing market, fuelled by moderate overvaluation and price acceleration,” said Bob Dugan, CMHC’s chief economist. “House price growth continues to outpace economic fundamentals likes household income and population growth. In 2018 and into 2019, housing starts are projected to decline while house prices should increase over the forecast horizon, but at a slower rate than in the past four years.”<\/p>\n Toronto and Hamilton have been specifically called out for price growth that’s not supported by wage or population increases\u00a0while Vancouver suffers from moderate overheating, price acceleration and overvaluation as demand greatly outweighs supply, especially in the condo market.<\/p>\n CMHC expects that sales and new builds will both decline over the next two years, with the average MLS price to increase, but at a slower pace. It forecasts the average national home price to be in a range between $439,900 – $511,300 in 2017, and $499,400 – $524,500 by 2019.<\/p>\n Good news for buyers of newly-built houses: Tarion, the provincial warranty provider for new construction defects, has proposed upping the amount of deposit protection by 10 per cent, from the current $40,000 to a minimum of $60,000 and maximum of $100,000.<\/p>\n These amounts will better reflect the prices of homes in the Ontario market, which have seen double-digit appreciation over the last year. The increase applies to houses only as newly-built condos are already covered by a number of warranties and consumer protections.<\/p>\n The proposal follows a provincial overhaul of Tarion<\/a>, which, in addition to its role as warranty provider, was previously regulator of the pre-construction industry. Those overseeing powers have since been stripped by the province in lieu of a standalone regulator. Earlier in the month, improvements were announced targeting the claims process purchasers of homes with defects must undertake, which had drawn criticism for being convoluted and unfairly stacked against the consumer.<\/p>\n The practice of flipping a pre-construction condo \u2013 also known as selling on assignment<\/a> \u2013 has been criticized for speculatively driving price growth\u00a0in Canada\u2019s hottest real estate markets. Ontario Finance Minister Charles Sousa even went as far as to refer to those who use the tactic (which involves purchasing a unit in development and selling it for more before the original deal closes) as \u201cproperty scalpers\u201d.<\/p>\n Now, the Canada Revenue Agency is cracking down on paper flippers, digging into their sales records to see if they\u2019re effectively dodging taxes on their profits. The tax agency has ordered 44 developers to release information on a total of 2,800 such deals over the past year in Toronto, reports the Globe and Mail<\/em>, and has plans to do so as well in Vancouver.<\/p>\n \u201cIn the Toronto area in particular, audit work has increased substantially on what are called \u201cassignment sales\u201d, wrote CRA spokesperson Paul Murphy to the Globe<\/em><\/a>. \u201cThe profits from flipping real estate are generally considered to be fully taxable as business income.\u201d<\/p>\n As there\u2019s no official data collected on paper flipping deals, it\u2019s not clear just how widespread it is in the Toronto market \u2013 however, as a result of the crackdown, the CRA will be joining forces with the province to better monitor and leverage real estate data to track activity.<\/p>\n It\u2019s no surprise that owning a home costs more in Canada\u2019s largest west-coast city. However, a new study from Century 21<\/a> finds that not only is Vancouver\u2019s lower mainland home to the nation\u2019s most expensive neighbourhood, but also encompasses seven out of the brokerage\u2019s top 10 list.<\/p>\n Vancouver\u2019s west side takes the title of Canada\u2019s least affordable neighbourhood, with homes selling for an average price per square foot of $1,210. Downtown Vancouver comes in at a close second with $962.75, followed by downtown Toronto at $818.86.<\/p>\n The rest of the list ranks as following:<\/strong><\/p>\n For more perspective, the study equates the top price contenders to other hot international markets; West Vancouver is akin to San Fransisco ($1,454.57) in affordability, while Toronto is priced similarly to Tokyo ($775.72), and Montreal ($519.51) to that of New York City ($508.62).<\/p>\n So where should Canadian home buyers seek an affordable deal? Windsor, ON has been crowned as the most affordable city to purchase real estate, at ($94.64 per square foot), followed by Moncton, NB ($99.84), Halifax, NS ($130.70), and St. John\u2019s, NL ($166.67).<\/p>\n In the aftermath of the Ontario Fair Housing Plan, one trend is clear \u2013 more affordable home types are seeing the most\u00a0action, even as overall sales numbers\u00a0slide.<\/p>\nBank of Canada Holds October Rate<\/h2>\n
CMHC Warns\u00a0Market Increasingly Vulnerable<\/h2>\n
Better\u00a0Deposit Protection for New House\u00a0Buyers<\/h2>\n
CRA Cracks Down on Paper Flipping<\/h2>\n
Vancouver\u2019s West Side is\u00a0Canada\u2019s Priciest Neighbourhood<\/h2>\n
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Condos Toronto\u2019s Hottest Housing Type: TREB<\/h2>\n