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Blog by Kevin Wong

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Valuations of Canadian Real Estate In Major Canadian Centers

The UBC Sauder School of Business – Center for Urban Economics and Real Estate, Teranet and National Bank, and Standard & Poors put together an “Enhance Real Estate Chart Book” consisting of 32 charts that summarize trends, key factors, and relative valuations of Canadian real estate in major Canadian centers.

Its a very detailed report on the current Canadian real estate climate, the overall outlook is negative and housing is expected to begin an extended contraction phase resulting in a move of home prices back towards long term sustainable valuations.

Excerpt summary from the “Enhanced Real Estate Book”:

map-canada

The prevailing themes stimulating Canada’s housing market over the last decade have been twofold: Firstly, the organic growth of the Canadian economy in response to global demand for commodities has resulted in wealth accumulation and economic growth which can justify a component of house price appreciation. Secondly, over the last decade, there has been a rapid increase in Canadian mortgage and household debt which served to inflate housing prices through financial leverage. Both of these two factors, one sustainable but subject to contraction risks (GDP growth) and the other unsustainable for the long term (enhanced leverage), have amalgamated into the almost unprecedented housing bull market.

The full report can be read here: http://www.pacificapartners.com/blog/2011/10/24/1488/