The Canadian housing market isn’t showing any indications of a collapse or downward spiral, according to a newly released report by Royal Bank of Canada (RBC) economists.
The Canadian Housing Health Check report “provides RBC Economics’ assessment of key indicators of Canada’s housing market that are deemed to offer early warning of potential imbalances.” The report has some good news for the Canadian housing market. According to the RBC, the risk of “overheating” has eased as the “Canadian housing market calms down.” The threat of “an uncontrolled upward price spiral,” which many people following the market have worried about in this hot market, “has considerably diminished.” The report’s Housing Market Dashboard, which has a stoplight-inspired theme of green, yellow, and red to highlight 10 areas the RBC assessed. It offers an at-a-glance comparison of how the Country and its four largest housing markets– Toronto, Montreal, Vancouver, and Calgary – are faring and what RBC economists expect to see in the market’s future. The Dashboard highlighted two major problems nationwide: affordability and the number of homes under construction (multiples). It also says the rental market is outside of historic norms. The ongoing pandemic, especially concerning the rise of the Delta variant, could present future problems for the market, the report found. Montreal’s market had the fewest levels of concern, with only one area showing a significant risk: homes under construction (multiples). It was also the only major market to have demographics “within historical norms,” which also beats the nationwide demographics. The Toronto market seems to be closely following national market trends, more so than the other major markets. Even though the market has cooled some since last spring, Toronto is still doing well. Slow listings have kept the market tight. The resale market, interest rates, new home inventory singles, new home multiples, and single homes under construction were found to be ”within the historical norms or not posting immediate threat.” However, the report was not without concern as three areas of the Toronto Housing market were found “significantly outside of historic norms and posing much higher risk than usual.” The RBC’s areas of concern pertaining to the Toronto housing market is the city’s affordability, its rental market balance, labour market, demographics, and the number of homes under construction (multiples). The report also indicates a “dip in population growth [in Toronto] poses a risk,” but believes that will be short-lived. While there is still room for improvement, we like a lot of what we are seeing in the Canadian Housing Health Check. The Toronto housing market is still steaming along. Hopefully it will continue to do so in a sustainable way for the foreseeable future. Comments are closed.
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AuthorLarry Weltman is a Customer Service Representative for AccessEasyFunds Limited, or AEF, an Ontario-based firm Archives
November 2022
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