Toronto residential real estate prices have now made it the second biggest bubble in the world, according to the UBS Global Real Estate Bubble Index. Vancouver is not far behind as the world’s sixth biggest bubble.
As reported in Better Dwelling, an online real estate commentary, a price correction in both markets from 2018 to 2019 halted by the end of 2019 when mortgage rates fell and the pandemic hit. Since then, home price growth in Toronto and Vancouver has been accelerating at a rate unseen by many markets.
UBS expects the Vancouver market to cool by tightening down payment and income requirements for mortgages to moderate current market dynamics. The global Swiss bank believes that mortgage rates will likely rise in 2022 to discourage foreign real estate investments and end the current housing frenzy.
Residential real estate, as an investment and as security for credit, may soon become an increasingly risky bet, and experienced advice is essential in any transactions involving real property.