If anybody knows anything these days it is that now is probably one of the worst times to buy a home if you reside in Toronto or Vancouver. Why do you think people are moving farther up north to buy homes? Well they are cheaper, but is it really worth it in the end? To travel across the city to get to work. Worst is a strong word, but I would say difficult time considering the real estate market has skyrocketed over the past 10 or so years.
So why is it that Royal bank is keeping a closer eye on the housing market in Toronto and Vancouver according to CEO of Royal Bank David McKay. Canada’s most well-known and reputable banks are facing pressure from the government in concerns to mortgage overwriting with the thought and scare that there will be a price correction with homes in Toronto and Vancouver
According to Vancouver Sun, the employers are not stressing about the real estate housing market and they are in fact content with it considering their clients credit profiles are strong and established. They are confident in their credit-worthy customers. You see for banks it works in there favour if the market is high. So the biggest risk for Canada’s Banks could possibly be Canadian housing. Evidently, it is a threat.
So if something were to happen they would need to take matters quickly and proficiently. In addition, if there happens to be a decline or crash in the market it would be unsubstantial for them. It doesn’t seem like there’s going to be a correction in the market anytime soon, but it is always good to inspect it. Just like when you go to the doctor for a checkup. You’re not suspecting that there is anything wrong but it is always good to make sure everything is in tiptop shape.
But at the end of the day housing affordability is still an issue for Torontonians and citizens from Vancouver. We should really be promoting plans that alleviate debt. And according to David McKay this is what is going to be implemented.
The bank is supporting the Federal government’s shift to incorporate experts to help with housing concerns. Vancouver Sun claims that expenses for a single detached house in Toronto were 71.4 per cent of the median household income, while in Vancouver costs were at 109 per cent of the median revenue. This means RBC’s profit has gone up exponentially. Revenue has gone up about 2 billion dollars. At the end of the day everything is not personal but just business. In the month of August there has been a decrease in sales according to Rew, considering that buyers are waiting to see what happens.
According to the Huffington Post, this housing bubble is no good. The escalation of household credit is because of the depleted cost of taking on more liability. So the people to blame are ourselves? And to make matters worse, household debt was at around 165 per cent of non-refundable income in the first quarter of 2016.