Canadian house prices may be seen by some as among the most inflated in the world, but observers on the home front don’t see problems on the horizon.
A year ago, the housing market was suffering from new mortgage rules brought in by the government to cool things off. Now, homebuyers appear to be rushing to beat higher mortgage rates, driving up sales and prices.
As The Globe and Mail’s Tara Perkins reported this week, sales across the country picked up by 11.1 per cent in August from a year ago, and 2.8 per cent from July. Average home prices rose 8.1 per cent over the 12 months, while the MLS home price index climbed 2.8 per cent. The Canadian Real Estate Association also updated its forecast for 2013 sales.
Some observers, such as the Organization for Economic Co-operation and Development, have ranked Canada’s housing market as among the world’s frothiest, but Canadian economists and the Bank of Canada don’t see a problem at this point.
“I don’t perceive that there is a bubble in Canada’s housing market,” central bank Governor Stephen Poloz said this week.
The way he sees it, The Globe and Mail’s Barrie McKenna and Brent Jang reported, markets have reacted to the changes in mortgage rules “in a way which has in effect engineered a soft landing, a much more comfortable kind of situation.”
Canadians have a debt problem – the key measure of a consumer’s debt burden now stands at a record level – which is why Finance Minister Jim Flaherty and Mr. Poloz’s predecessor Mark Carney urged households for months to put a lid on it. Which they have, to an extent, because credit growth has slowed.
“What I have been suggesting, though, is that people take care to do the arithmetic,” Mr. Poloz said.
Read More @ The Globe and Mail
Meanwhile, you may to consider spitting out $8M bucks for Mulroney Mansion …
BRIAN and MILA MULRONEY LIST THEIR WESTMOUNT HOME
The house belongs to former Prime Minister of Canada Brian Mulroney, and his wife, Mila Mulroney.
According to the Globe and Mail, the Mulroneys bought this house in 1993 for $1,675,000. But according to Huffington Post that posted the house 3 days ago, the couple bought the house for $1,000,000 and put in $700,000 in renovations.
It is currently evaluated at $4,100,000 (probably not too far off).