I list the reasons that the Canadian Real Estate Bubble will BURST in 2018. Which countries will join in? I’m looking at you Australia and USA.
Link to the Interest Rate Video I mention here: https://youtu.be/gB86AGhB6gg
1) 2 BoC (Bank of Canada) rate hikes. One in July and another in September. More to come next year.
2) Stress testing mortgages with OVER 20% down payment. Reducing the buying power.
3) Buyers are sitting on the sidelines waiting to see what happens.
4) Debt levels in Canada are very high.
5) Rising Canadian Dollar makes real estate more expensive for foreign investors.
6) Foreign buyer loopholes are tightening up in Canada and China. The first step was implementing Foreign buyer rules, now they are starting to close the loopholes.
7) The downturn has already begun. It doesn’t really seem like the beginning of anything because it hasn’t gotten large enough for the mainstream media to “call it” yet. By the end of of 2017, or sometime in 2018, it will be a long enough sustained fall that they will be able to call it a bubble. (And by the way, don’t start in about Vancouver prices going up after a slump. Because of prices ballooning in Vancouver, many people were forced into condos because of their cheaper price point. Foreign investors were, and are, buying up presale condos as well. This is not a recovery of the Vancouver real estate market, this is the death throes of the Vancouver real estate market.)
From what I gather some of the most interesting things happen in the Fall (September and October). There are a lot of market watchers that see things moving in the next couple months.
The reason I am saying the bubble will burst in 2018, is because I think that is the year history will remember as the bubble bursting. Just like people recall 2008 as being the financial crisis in the states even though it had it’s start well before 2008. 2018, hold onto your butts.