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Real Estate - Dec 12, 2014

No crash on the horizon, according to major source   by Justin da Rosa | 12 Dec 2014 Another day, ...

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Canada needs another 4.5 million homes warns study

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A  new study says that we will need another 4.5 million homes over the next three decades. The report from Urban Futures points to population growth and increasing life expectancy and shows a marked departure from the predictions that had historically been reported. The generation that followed the baby boomers was smaller in number, leading to forecasts that there would be a meltdown in the housing market as the boomers vacated their homes. However growing families and strong immigration has changed that. Urban Futures says there have been 2.2 million extra occupied homes since 2000, or around 185,000 per year on average and with a large number of seniors living longer and being able to stay in their homes for longer, this figure is edging higher. The study predicts that 82 per cent of those in homes today will still be alive in 2033 and 73 per cent by 2041. With net migration around 1 million it’s easy to see how the figures stack up..

 



 

 

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Friday, December 12, 2014 - Real Estate

No crash on the horizon, according to major source

 

by Justin da Rosa | 12 Dec 2014


Another day, another opinion about a potential housing crash is voiced; this time, however, it’s optimistic and the source is influential.

Governor of the Bank of Canada, Stephen Poloz, told reporters in New York Thursday that the BoC does not believe the type of drastic rise in mortgage rates or unemployment that would contribute to a housing crash will materialize, according to the Globe and Mail.

“The risk comes when some catalyst sets off the vulnerability,” Poloz said. “In this case it would be, let’s say, a rise in unemployment, a significant one, where it makes people have difficulty paying for their mortgage, or a rapid rise in mortgage rates, neither of which we’re expecting.”

His comments come on the heels of a central bank report that estimates housing in Canada is overvalued by 10-30 per cent. However, the report also pointed to the shortcomings of the methodology used to arrive at the estimation.

“There are 43 major house price cycles in this sample, which allows the estimation method to obtain more precise estimates of the model’s parameters. However, like other models, it suffers from a number of shortcomings ,” the bank’s Financial System Review states. “For instance, house price fluctuations in each country are determined solely by changes in demand conditions (i.e ., real, per capita disposable income and a long-term government bond yield) . The supply side is not explicitly modelled . Constant cross-country differences are captured by country-specific intercept terms, but differences that vary over time are not included.”


posted in News at Fri, 12 Dec 2014 20:12:11 +0000



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