RE:Surprised....Not so surprising! Remember Canada is not the US
1. Americans tend to be more invested in the market than Canadians
2. The US had a massive Housing Correction back in 2008 Canada did not so we have the most overvalued housing market in the world.
3. Canadian Mortgage debt is higher so more succeptable to interest rates.
4. Personal Bankruptsies or insolvencies increased 22% last month and more to come.
5. The housing market is Canada is responsible for more than 2 times the US as a percentage of GDP
6. The Condo market in Canada and this is a scary one that could cause the pyramid to collapse. In the US and Europe the assignment market is a small fraction of Real Estate sales. In Canada it is massive. So what does that mean. Simply at least 1 in every 5 condo transaction is an assignment. So a new project is about to start they need to pre-sell 75% of the condo in order to get financing to begin. So the developer sell condos for 2024-2025 possesion or longer some times. So the ones they sold acouple of years ago will close next year and the follwing year. Some project are more than 50% assignment. So you buy 3-4 condos slap down your deposit no need for for actual financing for a couple of years until they actually close. In the mean time you can sell ie assign the units to someone else at anytime. Interest rates so rapidly these investors ie flippers did not have time to get out so condo sales are off over 75%. So what happens if they do not close? The flippers lose their deposit and the units go back to the developer where he has the right to sell them. The flipper are now responsible for his losses so lawsuits galore will happen. Not only are the flippers responsible for his losses but also responsible if those he or she sold or assigned to if they cannot close or should walk as prices fall. Acording to prominent real estate lawyers lawsuit are already stacking up! So question do you save your house or condo or go on holidays. People who bought at the peak in the GTA are already down $250 on average meanwhile there mortgage costs are skyrocketing and banks could refuse to renew unless additional funds are added to meet the covenants of the mortage.
7. Mortage type is completely different in the US versus Canada. In the US the bulk of the mortgage are wrote at a 30 year fixed rate so homeowners are covered for a rapid rates rise. Very few actually take variable rate mortgages. On the other hand variable rate mortgages are really popular so home owners are subject to rapid rises in mortgage rates.
8. The air market is totally different in the US which is dominated by domestic fly. As a percentage domestic flights in Canada are lower.
At anyrate Returns may be right and you could see $5 or $10 should things get uglier in the real estate market in the Spring!