For a better experience on Caymanian Times,  update your browser.

Canada’s high home prices remain

Canada’s housing market is “relatively insulated” from a US-style crash and Canadians might simply need to get used to high home prices, according to the chief economist at Chartered Professional Accountants.

In his report on housing and household debt in Canada and whether a crisis is looming, economist Francis  Fong examined the risks and vulnerabilities of the Canadian housing market and whether the widespread rise in household debt combined with unprecedented home prices meant that the often-predicted price crash was imminent.

Mr Fong compared the characteristics of the Canadian housing market with those that caused the US subprime crisis of 2008. He said: “Canada does not share the credit quality issues that plagued the US housing boom-bust cycle, such as the prevalence of subprime mortgages. Most critically, Canada’s housing market has not been driven by growth in low credit quality mortgages, despite the impression given by rapid price gain. In contrast, [Canadian] credit quality has actually improved alongside the growth in home prices.”

Mr Fong cited Equifax data that found the proportion of homebuyers with “very good” or “excellent” credit scored increased from 81.5 percent in 2013 to 84 percent in 2017. Among first-time homebuyers, the improvement was between from 79.4 percent to 82.4 percent. Mr Fong said: “This suggests that home price gains are being driven by those who can actually afford such prices.” He also pointed out that 82 percent of Canadian mortgages are uninsured, which means that the buyer had at least a 20 percent down payment.

Subscribe this Story

If you enjoyed this article, subscribe to receive more just like it.

Comments 0

We appreciate your feedback. You can comment here with your pseudonym or real name. You can leave a comment with or without entering an email address. All comments will be reviewed before they are published.

*=Required
Captcha Image
Note: Please enter the captcha code exactly as mentioned in order to verify and continue.

Online Poll

Should the Cayman Islands Government move ahead with plans to build a new Cruise Port?

Popular Comments

Most Popular News

Signup for Daily Alerts

Get the latest updates on your email and stay connected with us. Subscribe with us.