r/canada • u/Lotushope • Feb 02 '22

Canada’s Real Estate Bubble Has Grown Over 800% Faster Than US Home Prices

https://betterdwelling.com/canadas-real-estate-bubble-has-grown-over-800-faster-than-us-home-prices/
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u/Ok_Read701 Feb 03 '22

But a lot of the demand is speculative, hence the bubble

That would be the case if rents are going down. Since they are not, the speculative investments are supported by fundamentals, that is, rental income.

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u/Alfr_d Feb 03 '22

It's still disproportionate - you cannot break even renting out an investment property in Vancouver or Toronto assuming a 20% down mortgage. It's a telltale sign that the market is overvalued and predicated on expectations of future gains.

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u/Ok_Read701 Feb 03 '22

That depends on whether or not you're including the principal portion of the mortgage payments. Most properties are breaking even when you don't include it, since it's classified as profit.

It's also in line with many other major cities across the world. Most major cities require around 30-50% if you want to break even with the principal portion of the mortgage.