Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Wednesday, December 11, 2013

Canada Has Most Overvalued Housing Market: Deutsche Bank

Canada has the most overvalued housing market among 20 developed countries, says a report from Deutsche Bank.

The new report comes as real estate giant Re/Max predicts an “exceptionally healthy” year for real estate in 2014.

Deutsche Bank estimates that house prices in Canada are overvalued by 60 per cent. That’s an average of two different measures: Home prices compared to rent (88 per cent overvalued) and home prices compared to income (32 per cent overvalued). The analysis compares house prices to historical norms.


“Based on their analysis, anyone in the market for property might want to avoid Toronto or Vancouver,” writes the Wall Street Journal. “On the other hand, if you can get around Japan’s restrictions on foreign investment, an apartment in Tokyo looks like a steal.”

Japan ranked as the most undervalued housing market in the bank’s survey, about 39 per cent below historical norms.

The Bank of Canada earlier this week reiterated its assertion that high household debt levels, pushed up by rising house prices, are the largest domestic risk to Canada’s economy.

But persistently high prices and record household debt levels won’t stop Canada from having an “exceptionally healthy” housing market in 2014, realtor Re/Max said Wednesday.

Re/Max says that nationally, home sales are expected to climb two per cent to 475,000 units next year after a three per cent increase to well over 453,000 projected for 2013 when all the numbers are in.

At the same time, the value of an average Canadian home is forecast to escalate three per cent to $390,000 in 2014 after rising four per cent to $380,000 in 2013, according to a survey of the group's independent brokers and affiliates.

Meanwhile, the outlook is for the residential housing market to remain in “clear balanced territory'' throughout 2014, although some pockets and price points may see continued shortages.

Re/Max says its optimism is largely based on an improved outlook for Canada next year which is expected to see the country enjoy economic growth second only to the 2.8 per cent rate of the United States among Group of Seven countries.

And it says that while Canada's economic growth is currently forecast at 2.3 per cent, it could move higher given the impact of strengthening global economies on the Canadian manufacturing sector.

“Canadian housing markets are on solid ground after a somewhat harrowing first and second quarter of 2013,'' said Gurinder Sandhu, executive vice-president and regional director, RE/MAX Ontario-Atlantic Canada.

Better than expected economic performance, relatively stable inventory levels and the threat of higher interest rates down the road ”proved mid-year game changers, providing the stimulus necessary to jump-start home buying activity,'' Sandhu said.

As a result, the momentum that emerged in the latter half of the year is expected to spill over into 2014, setting the stage
 for continued growth and expansion in most residential markets, Re/Max said.

Overall, 23 of 25 markets surveyed, or 92 per cent, are set to experience average price increases by year-end 2013, with Hamilton-Burlington the leader at 7.5 per cent, followed by Barrie, Ont. and District at seven per cent, Calgary and St. John's, NL, at six per cent, and Greater Vancouver, Winnipeg and the Greater Toronto Area at five per cent.

The forecast for 2014 shows the upward trend continuing, with values expected to again climb in 92 per cent of markets surveyed, led by Greater Toronto at six per cent.

Although there are several factors that are expected to contribute to rising housing prices on a national basis, one of the most pressing is build out, Re/Max said.

“Nowhere is that more obvious than in Vancouver, where the mountains and the ocean have prevented further growth, and the Greater Toronto Area, where the greenbelt has stymied future development.''

“As such, the availability of low-rise homes relative to the population is expected to contract, placing further pressure on prices,'' it said.

“We're definitely seeing a greater commitment to higher density at a municipal level,'' said Elton Ash, regional executive vice-president, RE/MAX of Western Canada.

“In fact, the trend already underway in Vancouver and Toronto, has gained serious momentum in smaller markets where cities are moving to infuse vibrancy into the urban core through mixed-use residential/commercial/retail development.''
Original Article
Source: huffingtonpost.ca/
Author: CP/The Huffington Post Canada

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