The Great Canadian Real Estate Crash Of 2013

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Toronto is the largest condominium market in North America followed by Montreal, Calgary, and Vancouver along with Halifax and St. Johns. Up until 2013 the market had been growing and especially booming in Toronto. In 2013 this high condominium purchasing rate attracted the attention of the Bank of Canada, and the question was posed whether satisfying this high demand, including from foreigner’s side, was a good thing for the market. Following that, the banks became more “cautious” when lending funds for construction or to purchase a unit. Low interest rates were believed to be favouring the booming demand. An increase in interest rates was believed to be a serious threat, however the probability of that happening was perceived as low in…show more content…
The upward trend in condominiums ownership by individuals is seen in the numbers: in 1971 only 5% of all condominiums were occupied by private owners, whereas in 2001 this number reached 19%. In the same year two of every three apartments formed part of a condo. In 2001 condominiums accounted for 8% of all real estate in metropolitan cities, while they were only 1% of all real estate in smaller cities or in rural areas. There was a difference between the major metropolitan centers. Almost one fifth of privately owned real estate in Vancouver in 2001 were condominiums, 70% of which were apartments. In Quebec City and Montreal this number was 80%, whereas it was 50% in such cities as Edmonton, Calgary, and Ottawa dominated by “row houses” (Canada Mortgage and Housing Corporation, 2004). Immigration, Migration and Population Search for employment within a province and nationwide had led to an increase in migration within Canada, both intra and inter-provincially. External immigration increased too and the difference between external immigration and emigration abroad was estimated to reach roughly 316 thousand people in 2013. Such population growth may be a positive trend for the real estate market, yet it is seen by some a threat to economy fuelled by potentially rising unemployment (PWC, 2013). In 2013, migration patterns were benefiting Calgary at a higher than average national rate: 1.9% vs. 1.4% increase in population. Still, the popular belief
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