The Tale of the Canadian and U.S. Housing Markets

The mortgage crisis of 2007 marked catastrophe for millions of homeowners who suffered from foreclosure and short sales. Most of the problems involving the foreclosing of families’ homes could boil down to risky borrowing and lending. Lenders were pushed to ensure families would be eligible for a loan, when in previous years the same families would have been deemed too high-risk to obtain any kind of loan. With the increase in high-risk families obtaining loans, there was a huge increase in home buyers and subsequently a rapid increase in home prices. As a result, prices peaked and then began falling just as fast as they rose. Soon after families began to default on their mortgages forcing them either into foreclosure or short sales. Who was to blame for the risky lending and borrowing that caused the mortgage meltdown? Many might blame the company Fannie Mae and Freddie Mac, but in reality the entire system of buying and selling and free market failed home owners and the housing economy.

The housing crisis of 2008 can trace its origins back to the stock market trends of the mid- to late 90 's. During a period of extended growth in the stock market, increased individual wealth among investors led to generalized increases in spending, including in the housing market. With more disposable income in the pockets of consumers, the demand for housing increased in the late 90 's. Due to the fact that homes are large projects and their construction takes a large amount of time, the supply of homes in the market is inelastic on the short term. Because of the fixed supply of homes, as per the law of supply, which

The bursting of the housing bubble, known more colloquially as the 2008 mortgage crisis, was preceded by a series of ill-fated circumstances that culminated in what has been considered to be the worst financial downfall since the Great Depression. After experiencing a near-unprecedented increase in housing prices from January 2002 until mid-2006, a phenomenon that was steadily fed by unregulated mortgage practices, the market steadily declined and the prior housing boom subsided as well. When housing prices dropped to about 25 percent below the peak level achieved in 2006 toward the close of 2008, liquidity and capital disappeared from the market.

The housing crisis of the late 2000s rocked the economy and changed the landscape of the real estate business for years to come. Decades of people purchasing houses unfordable houses and properties with lenient loans policies led to a collective housing bubble. When the banking system faltered and the economy wilted, interest rates were raised, mortgages increased, and people lost their jobs amidst the chaos. This all culminated in tens of thousands of American losing their houses to foreclosures and short sales, as they could no longer afford the mortgage payments on their homes. The United States entered a recession and homeownership no longer appeared to be a feasible goal as many questioned whether the country could continue to support a middle-class. Former home owners became renters and in some cases homeless as the American Dream was delayed with no foreseeable return. While the future of the economy looked bleak, conditions gradually improved. American citizens regained their jobs, the United States government bailed out the banking industry, and regulations were put in place to deter such events as the mortgage crash from ever taking place again. The path to homeowner ship has been forever altered, as loans in general are now more difficult to acquire and can be accompanied by a substantial down payment.

Canada 's housing market is at an all-time high, they are known in Vancouver for having the most expensive housing market. This expensive market is not just a Vancouver problem, it is an issue growing throughout the nation and is depriving the average citizen to be able to purchase a house in their lifetime. There is a major issue with the state of the market and how it affects the current citizens. Issues have been rising where the average wage in Vancouver is estimated at seventy-one thousand per family household, according to the Vancouver Sun (2014), yet the average costing home as reached between five hundred thousand in the municipality to over one million within Vancouver, according to articles by Beth Lindsay (2015) of the Vancouver Sun, and Troy Landereville (2015) of The Maple Ridge Times.

Within the past decade, Canada - specifically ontario, has seen and experienced a rapid increase in its housing market. Although some speculate a crash nearing, its strong growth in Ontario has become one of this decade’s largest issues. During the year of 2016 the average price of a home in the metropolitan area was $688,011, however, prices have increased by 33% in 2017 making the average home worth $916,000 dollars. This issue presents many difficulties as it affects Canada’s economy, it’s residents, immigrants, and more. Although some have tried to pass bills in order to reverse the increase, the presented plans are much worse. Take for example, Kathleen Wynne's proposed “foreign buyers tax”. With a plan as such being passed, all of

Canada’s housing market was one of the best for the recent years, but even with all the concern of household debt home prices will still have risen by 5.5 per cent in 2016. Their House prices have nearly doubled in the past decade to keep up with the costs of oil. They continue to have troubles selling houses but continue to build more, as well as condominiums and apartments. Their “New Government” continues to watch housing closely

How are foreigners affecting the canadian housing market and what it does to the economy. The foreigners are affecting the market by buying homes and making profit off the homes and some of the homes are used for storing illegitimate money. Canadian homes are a source for illegitimate money and foreign income profit. The canadian economy gets affected because the money isn't going towards the canadians instead it is going to the majority of foreigners. Where is most of the foreigners buying housing in canada. The foreigners are choosing mostly toronto and vancouver. The foreigners are choosing these areas because of the location value and what is around the area for consumers. Such as grocery stores,transportation,restaurants,entertainment,and schooling. How hard is the Canadian housing market going to affect the economy and for how long. The Canadian housing

The US housing bubble and crash of the early 21st Century was unusual in that it was a truly national phenomenon. Historically, the bulk of residential real estate boom-bust episodes were usually regional. The consolidation of the US banking system, whereby banks merged across state borders, helped to sow the conditions where housing cycles became less provincial. Additionally, the growth of the Government Sponsored Enterprises (GSEs) facilitated the expansion of a national mortgage market. Recently, some commentators have been noting that the post-Great Recession recovery in US housing has reached dangerous levels, thereby implying that the sector could be experiencing another bubble. Consequently,

History helped to recognize the parallels between these eras and learn from them. The crisis of 2008 was not nearly as bad as the Great Depression, but like the Depression consumers lost trust in the market and were afraid to invest in the economy. The Housing Crash catastrophe, like the Great Depression contributed to the failure of banking institutions and led to high unemployment rates. Unlike the Great Depression, the crisis of 2008 was supported by more than a dozen economic stimulus packages provided by the federal government to jumpstart the economy. The federal government stepped in to bailout the banking institutions to avoid another Great Depression. It is important to look back on the history of these two national devastations and learn from their mistakes so we can be better prepared for future economic downfalls in the

Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1)

Vancouver's Housing market is on par to some of the most expensive in the world. The high price of homes has caused many local people to move out of the city and has caused a lot of controversy. Locals are questioning to what the municipalities and provincial government are doing to help. So why are these market prices so high. It mostly comes down to supply in demand. The pressure on the housing market has arisen due to foreign buyers and shadow flipping, as supply for affordable housing diminishing. The locals blame shadow flipping, international buyers, and a tax regime that favors ownership over renting (King, 2016). Recently the Local Government and the Province have implemented many new controversial policies and taxes to control rent

Many people grow up in families where they are told that homeownership is an important asset one should strive for. For the past year my sister and her husband have been trying to purchase their own home in the GTA, but it came to no surprise they struggled to find an affordable home. “Prices have ticked up every year since 1998 (with one exception: in the 2008 recession, they dropped briefly and only barely)” (National Post). Throughout the last couple years housing prices in Canada continue to rise, with the highest house prices found on the west coast in Vancouver, British Columbia. This report will mainly focus on the booming real estate markets in Vancouver and Toronto, exploring the existing problems and solutions.In 2015 and 2016, house

To begin, a brief history recap of the financial crises in 2008 will be given. Following that will be a breakdown of how the financial systems were set up in Canada and the U.S. We will then, in detail, discuss the Canadian and the U.S financial markets, in particular, the housing market and how each country was affected by the 2008 financial crisis. Lastly, we will proceed to evaluate the overwhelming differences between Canada and the U.S; from their core financial system to mortgages that allowed the Canadian market to remain excluded from the dire consequences of the US market recession, which followed shortly after the financial crisis.

In Vancouver, British Columbia the housing market has been termed as an-affordability crisis, in which Vancouver’s middle-upper class are painted as the main victims of an accelerating housing market. Speculation as to what or who is heating up the housing market is controversial, some explanations point to varying demographics, limited geographic space, and low interest rates but overall there seems to be an emphasis toward foreign investors, specifically buyers from mainland China. Kerry Gold’s piece, The Highest bidder: How Foreign Investors are Squeezing out Vancouver’s Middle Class, in The Walrus parallels alongside this view. Gold may not be wrong in her assertion, much effort, money, and research has been pooled into investigating