Would-be investors who remain wary of the Canadian real estate
market’s price growth should take a measure of comfort in the
results of a new study conducted by Chartered Professional
Accountants of Canada (CPA Canada).
The research found that the market’s fundamentals have
robustness as their main feature, precluding any U.S.-style
meltdown in the near future.
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gift of real estate success this year – grab a seasonal
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“Beyond prices and debt levels, Canada shares far fewer
similarities with the U.S.than you might think.This becomes very
apparent when you look at just one measure:credit quality,” CPA
Canada chief economist Francis Fong stated.
Fong emphasized that seeing the U.S.crisis as a reference point
for the possibility of a Canadian collapse would be futile due to
the pre-eminence of different factors in the two markets.
Read more:Canadian
retail will be a great investment destination in 2019
The sheer volume of subprime mortgages issued to borrowers with
low credit quality, who cannot afford to repay debt, is frequently
cited as one of the leading causes of the U.S.breakdown.
In comparison, Canada’s share of high-credit-quality clients
increased from 66% in 2002 to 88% in 2017,
Would-be investors who remain wary of the Canadian real estate
market’s price growth should take a measure of comfort in the
results of a new study conducted by Chartered Professional
Accountants of Canada (CPA Canada).
The research found that the market’s fundamentals have
robustness as their main feature, precluding any U.S.-style
meltdown in the near future.
Give the
gift of real estate success this year – grab a seasonal
CREW subscription.
Use code HOLIDAYS2018 to claim your free festive gift.
“Beyond prices and debt levels, Canada shares far fewer
similarities with the U.S.than you might think.This becomes very
apparent when you look at just one measure:credit quality,” CPA
Canada chief economist Francis Fong stated.
Fong emphasized that seeing the U.S.crisis as a reference point
for the possibility of a Canadian collapse would be futile due to
the pre-eminence of different factors in the two markets.
Read more:Canadian
retail will be a great investment destination in 2019
The sheer volume of subprime mortgages issued to borrowers with
low credit quality, who cannot afford to repay debt, is frequently
cited as one of the leading causes of the U.S.breakdown.
In comparison, Canada’s share of high-credit-quality clients
increased from 66% in 2002 to 88% in 2017, according to the
CMHC.During the same time frame, the proportion of
low-credit-quality borrowers fell from 17% to just 3%.
“The situation in Canada is likely not a bubble in imminent
danger of deflation;in fact, housing prices may reflect the true
value of living space in Canada and in some markets increased
household debt may be the new price for real estate,” Fong
explained.
“Our cities frequently are listed among the best places to live
and work in the world and, compared to their peer cities abroad,
they are not among the most expensive.We may simply be dealing with
the law of supply and demand, so affordability could continue to be
a challenge for the foreseeable future,” he added.
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