TORONTO CONDOS ATTRACTIVE TO FOREIGN BUYERS
Now the world read ECONOMIST Magazine in its April 5th edtion confirms our views. It compares house prices around the world in terms of over and under valued and where a housing bubble is most likely to happen. Now we have never believed in national real estate markets - they are defintely local, but you can use their findings for general trends. The Economist has compared average house price increases over the last TEN years against corresponding increases in incomes and declining interest rates to determine where prices should have increased over this period if affordability remained fixed. It looked at the top 20 countries in the world. House prices were overvalued in Ireland by 30+%. Britain was at 28% and the U.S. was at 11%. All are experiencing house price declines in 2008.
Only two countries had negative numbers - Austria and Canada at minus 3%. That means prices in Canada could rise by another 3% on just affordability alone. Now these numbers are for Canada as a whole and when you consider Alberta, and Saskatchewan with price increase over 50% in the last two years, and Ontario having the lowest increases in prices in Canada, then Toronto condo prices have a long way to go. The 'locals' don't seem to get this, but foreign investors, who look at the world markets sure do.
And when you factor in our currency - sure it is stronger against the U.S. dollar, but it is still relatively cheap when compared to the Euro and British Pound.
Why is it that Canadians have less faith in themselves and their country than people looking in from the outside??