Real Estate Market in Two Canada Cities at High RiskAccording to an article published in investment publication, “The Visual Capitalist,” a recent UBS Group AG Report Lists Toronto and Vancouver in the top three most likely cities to experience a real estate bubble burst. UBS is an international investment bank in Switzerland and one of the most respected banking institutions on the planet.
Here are the top five cities at the highest risk:
- Hong Kong
- Interest rates increasing
- Housing prices going down
- Political tensions
- Housing affordability issues getting worse - making it harder to make ends meet each month
Annual price growth rates in some major cities have been negative (adjusted for inflation), and this is not a good sign. These cities include Toronto, London, Geneva, and New York. Vancouver is experiencing positive price growth of around 20 percent, so it is faring better from that aspect.
What about the US?
Oddly enough, UBS does not list any US cities in immediate danger. However, one must have concern for San Francisco with its 1.7 million price tag for the average home.
What Does All This Mean?
Hong Kong is a perfect example of real estate fueling financial woes. For example, ten years ago, you had to work for twelve years to afford an apartment (645 square feet). Today you must work ten years longer (22) to afford the same apartment.
What Can Toronto Real Estate Buyers and Sellers Do?
Should you just sit around and wait for a real estate bubble to pop? Many experts say “no.” There is no way to tell what will happen, and prices could eventually go up even more. Here are some things to consider:
- Condos are very popular and can be the best deal for many families today.
- Get pre-approved for your mortgage – many lenders have raised their standards, and it may be harder to qualify for some loans.
- Think of your future needs so you will not have to sell and buy again for some time.
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