This presentation looks at real estate market of Canada for the month of October 2017 including issues facing the housing market in Canada.

1. PAUL YOUNG, CPA, CGA
NOVEMBER 17, 2017
Real Estate – Canada – October
2017

2.  This presentation looks at real estate market of Canada for the month of October 2017
including issues facing the housing market in Canada.
Description

3. Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Business Process Change
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

4.  Housing Starts
 Average House Pricing for Canada
 Changes Wages, Lumber Price and Housing Prices compare to CPI
 Housing Affordability
 Blog – Real Estate
Agenda

5. Source – BMO Economics
Housing Starts – Canada

6. Source - http://www.crea.ca/news/canadian-home-sales-edge-up-again-in-october/
Average House Pricing for Canada

7. Source – Stats Canada
Changes in Wages, Lumber and Housing Prices vs CPI

8. Source - https://www.nbc.ca/content/dam/bnc/en/rates-and-analysis/economic-analysis/housing-affordability.pdf
Housing Affordability
NUMBERS: Affordability continued to deteriorate in Q3
for Canadian housing. The mortgage payment on a
representative home as a percentage of income (MPPI)
registered an increase of 2.0 percentage points (a
higher MPPI means lower affordability) after a 0.5-
point rise in Q2.
Source – National Bank of Canada – November 1, 2017 Source - https://www.liberal.ca/wp-content/uploads/2015/10/New-plan-
for-a-strong-middle-class.pdf
Liberal 2015 election

9.  Housing market key area of the economy as such any swings either good or bad may impact GDP. Here are few issues in play
when it comes to the real estate market in Canada.
 Wages are under pressure – Wages have barely budged in 40 years - http://globalnews.ca/news/3531614/average-hourly-
wage-canada-stagnant/.
 Interest rate hike – Interest rates have gone up. The Bank of Canada has signaled that Canada maybe heading to higher
interest - http://www.cbc.ca/news/business/loonie-bank-of-canada-interest-rates-1.4191573 or
https://www.slideshare.net/paulyoungcga/wages-and-jobs-canada-august-2017-81251991
 IMF has highlighted there is significant risk to overpriced housing market for Canada - https://betterdwelling.com/imf-
canada-overvalued-homes-g7-fourth-globally/
 Economy is growing, but not at a rapid pace. Bulk of GDP growth is led by the housing market and commodities. GDP for the
past two years is still average 2.2% which is the same rate as the past 15+ years
https://www.slideshare.net/paulyoungcga/canada-gdp-election-2015-promise-increase-gdp-growth
 There are systemic issues with real estate like supply, market valuation, cost of building, availability of land, etc.
 Housing Affordability - http://globalnews.ca/news/3573571/ontario-housing-affordability-2018-election/ or
http://www.macleans.ca/politics/for-the-record-ralph-goodale-on-the-economy/ -
https://www.theglobeandmail.com/report-on-business/top-business-stories/housing-affordability-itll-be-far-nastier-in-
toronto-and-vancouver-as-rates-rise-thistime/article36800993/ “Housing affordability has risen in the 3Q17”
Blog – Real Estate

10.  Lessons learned from Houston
 More and more people are moving from rural areas to cities for economic opportunities. The
problem with cities growing is the access to land. Many cities are surrounded by wetlands
and/or prime prairie land as such digging up those areas can cause issues in terms of rain fall
management as well as access to arable land for farming.
 Critics will also blame storms like Harvey on climate change. The planet does go through
phases, but it is not scientific proven those changes are man driven. We need to be very
careful that we do push to far with climate change agenda like Agenda 2030 -
https://www.slideshare.net/paulyoungcga/what-is-agenda-2030
 Many of us are touched by the stories coming out of Houston. I feel for the people of
Houston. I do think this maybe a time to reassess how we handle urban planning including the
management of land. Source - https://www.slideshare.net/paulyoungcga/urban-planning-
future-of-cities
Urban Planning / Houston

11.  https://www.theglobeandmail.com/news/politics/expanded-national-housing-strategy-to-include-new-rent-subsidies/article37046894/?click=sf_globefb
 Liberals are again buying off voters with taxpayers’ money “The federal government will announce direct rent support for low-income Canadians in
addition to spending billions on traditional and new forms of social housing as part of the Wednesday release of its long-awaited national housing
strategy.
 The above does not fixed the issues with low income Canadians. In fact the liberals have hurt low income more with their tax policies -
http://torontosun.com/news/national/two-thirds-of-low-income-canadians-paying-more-tax-fraser-study. FYI – The so-called carbon tax being forced
down on to the provinces will also hurt the poor as housing costs will also go up. Australia removed the carbon tax as it was doing nothing for emission,
but forcing the costs up for its citizens - http://www.cbc.ca/news/world/australia-s-carbon-tax-repealed-after-2-years-1.2709642
 I will always be about solutions, but one-off policies like this from the Liberals do not fixed the issue with housing:
 Availability of land, taxes, building costs, hydro rates (https://www.slideshare.net/paulyoungcga/real-estate-canada-october-2017)
 People moving to cities (part of agenda 2030 )- https://www.slideshare.net/paulyoungcga/agenda-2030-new-world-order-canada-november-2017
 Employment market – Jobs are churning and part-time - https://www.slideshare.net/paulyoungcga/job-market-canada-october-2017
 Canada plans to add more immigrants without any real strategy to align immigration with skills gap -
https://www.slideshare.net/paulyoungcga/government-policies-education-skills-development-canada-november-2017
 Liberals are not creating the condition for business investment, i.e. high taxes, regulatory burden to get projects off the ground, lack of money for
infrastructure, etc. - https://www.slideshare.net/paulyoungcga/election-promise-goods-to-market-canada-october-2017 or
https://www.slideshare.net/paulyoungcga/building-permits-canada-september-2017
 It would be nice if people question the Liberals more than they do when it comes to their various policies.
Blog – Rent Subsidies

12.  “Canadian home prices rose in May as Toronto remained robust despite recent government efforts to cool the market, while prices in Vancouver picked back up to hit a fresh peak, data showed on
Wednesday.
 The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices rose 2.2 per cent last month.
 Prices were higher in all 11 cities included in the index, led by a 3.6 per cent increase in Toronto and a 3.1 per cent rise in nearby Hamilton.”
 http://www.bnn.ca/toronto-housing-market-stays-hot-as-canadian-home-prices-rise-in-may-1.778739
 http://www.huffingtonpost.ca/2017/06/20/household-debt-canada-pbo-report_n_17227374.html Analysis
 There is issue with land, especially in major cities. Government have brought in legislation to protect sensitive areas from development http://www.mah.gov.on.ca/Page195.aspx
 British Colombia introduced foreign buyer tax to curb high price of houses - http://business.financialpost.com/personal-finance/mortgages-real-estate/cmhc-data-shows-foreign-buyers-have-almost-
disappeared-from-vancouver-market
 Bids and asks for property are getting ridiculous. http://www.cbc.ca/news/canada/kitchener-waterloo/kitchener-waterloo-2016-real-estate-bidding-wars-from-toronto-buyers-1.3622610
 There are old industrial sites also known as brown sites. The cost of cleaning up brown sites is very expensive. http://warming.apps01.yorku.ca/library/wp-content/uploads/2013/03/NRTEE-Cleaning-up-
the-Past-Building-the-Future.pdf
 mortgage rules allow people to enter the market when they likely should not. The mortgage approval process should look at net income as well as look at the ability to cover operational expenses for a
house. http://www.statcan.gc.ca/daily-quotidien/160212/dq160212a-eng.htm
 Federal government can set mortgage amortization period as well as thresholds for CMHC insurance. However, the federal government cannot control areas, like land or real estate commission as they
are either municipal or provincial jurisdiction. http://www.queensu.ca/iigr/sites/webpublish.queensu.ca.iigrwww/files/files/conf/Arch/03/03-2/Hulchanski.pdf
 PBO Office – Housing Affordability - http://business.financialpost.com/personal-finance/why-its-time-for-canadas-financial-industry-to-put-the-customer-first/wcm/433faa13-8531-4a01-9a47-
229ac1220a87
 Source: https://www.slideshare.net/paulyoungcga/housing-market-canada-may-2017 or https://www.slideshare.net/paulyoungcga/canada-affordability-housing-crisis-june-2017
Blog – Housing – Systemic Issues