Canada’s Vancouver Tops List
The recently-published UBS Global Real Estate Bubble Index 2016 ranks cities across the globe that are considered top real estate bubble risks and Vancouver tops the list this year. There are a total of 18 cities that made it on to this year’s bubble list.
According to the report, there are several factors working together to make Vancouver the world’s riskiest bubble city such as higher Asian demand due to the weak Canadian dollar, loose credit conditions, accelerating mortgage growth rate, etc.
Because of the higher foreign demand, the local government recently implemented an additional property tax for foreigners to buy in Vancouver – making it a higher risk property market because of the higher chances of price correction.
Author/Copyright: Ahmed Dawn www.adawnjournal.com
The report also names some other riskiest global property markets such as London, Stockholm, Sydney, Munich and Hong Kong. Some of the fairly-valued property markets are in Singapore, Boston, Milan, and New York. And real estate value in Chicago is actually undervalued.
Home prices in top-risk cities have increased on an average by 50 percent since 2011. The rate of increase at other major cities is only 15 percent.
On a separate note, Canadian site globalnews.ca reports (based on numbers provided by Chinese realty website Juwai.com) that foreign buyers are not flocking to Seattle and Toronto, instead of Vancouver, since the new additional foreign tax implemented in Vancouver.
There was a staggering 81 percent drop in Vancouver buying inquiries from August 2015. However, Seattle and Toronto real estate inquiries were up by 143 and 142 percent. Toronto has seen the highest searches in August for the last three years. Other Canadian cities foreign buyers have an eye on after Toronto are Calgary and Ottawa.