I can’t believe that summer is already coming to an end and the leaves on some trees are already turning colour.  I hope you had enjoyed the days of sunshine and the wonderful summer breeze as I have.  There’s still some time left, make the most of it if you haven’t already done so!   

There has always been a talk of a housing bubble every year and how the Canadian real estate is over valued by 25% or more.  Although this is quite a subjective topic and there are debates whether or not it is true on both ends, I want to put in my two cents on this topic as well.  Apparently, to this day, there is no bubble, at least not in the GTA, though I cannot guarantee it won’t happen.  

Why I feel there’s no bubble yet?  Here are the signs I look for to monitor the housing market … and when there are signs of changes, we can start to worry then: 

1. The population of GTA has been growing steadily and continues to grow today … this means people will always need housing. 

2. Even if the interest rate starts to increase today, banks are using a much higher qualifying rate to mitigate their risk.  We have the most conservative banks in the world and they don’t just lend to anyone. Their tighter qualifying rules filter out any risk-takers and as an investor, this is a huge obstacle when obtaining financing. 

3. The vacancy rate in GTA is still considered very low.  This means that housing is still in demand. 

Until any of the above three factors start to show signs of change I won’t worry too much about a bubble happening just yet.

If you would like to discuss this matter about real estate or the housing market, feel free to contact us and we, at CE Properties, would love to share our thoughts and views with you too!