Housing bubble fears are overblown says bank chief
The CEO of the Bank of Nova Scotia says that concerns over a housing bubble are overblown and the word ‘bubble’ is overused. Brian Porter says that credit growth is modest and the job market is stable and he believes that the bank’s exposure to the market has been well monitored and stress-tested. Porter says that Bank of Nova Scotia’s mortgage book of $200 billion can withstand interest rate rises or large increases in unemployment. He says the biggest challenge to the Canadian economy is maintaining its exports by ensuring good networks and he warns against being complacent. Read the full story.
Canadians spend more on renovation than new homes
Canada’s homeowners are spending more on renovating their existing homes rather than buying new ones. That’s according to figures from the Bank of Montreal which show that for the 12 month period to the end of June 2014, spending on renovation was $48.4 billion while spending on new home construction was $46.3 million. Reasons for the uptick in renovation include the inability of homeowners to trade up due to high costs and also the ageing population choosing to stay in their current homes and make improvements. Although this may sound like a problem for the construction (and mortgage) sectors, experts point to the growth in population creating extra need for new homes. Read the full story.
Toronto’s condo construction is still booming
Although some believe there is a slowdown in the condo market in Toronto, the construction of new developments continues and parking lots are disappearing in the process. RealNet Canada says that almost 80 sites have been sold in the first three quarters of this year, which will produce high-rise residential sites worth $806 million. It’s highly likely that the 2012 record of $1.1 billion will be beaten by the end of the year. Experts say that there is still a lot of room in the Toronto condo market with investors’ interest still very high. Read the full story.
Canadian investors putting their money south of the border
Lower prices and higher returns are attracting an increasing amount of Canadian real estate investors to the US. A report by Avison Young shows that the commercial sector has seen a 79 per cent increase in the first half of this year to $5.4 billion while private investors have put $801 million into US homes. However, a weaker Canadian dollar may see the rate of investment in the south decline, while lower prices for commercial property in Canada would also create a change of focus. Read the full story.