I am constantly thinking about the local housing market to a) help me figure out my personal investment strategy and b) because I am trying to understand the general market dynamics. These 2 charts, both from the IMF's Global Housing Watch, are quite interesting:
1) House Price-to-Income Ratio deviation from historical
Housing prices are not as affordable as they used to be. Either they were too low and just correcting now or they're getting unaffordable. Need more data points to get to a conclusion here.
2) House Price-to-Rent Ratio
Renting is not as bad as it is made to be in Canada. And owning a rental property is maybe not as attractive as it is also made to be.
A few caveats on these charts:
- Any view on the Canadian market as a whole are distorted by the Vancouver and Toronto realities that are much frothier than Montreal's, which is the market most relevant to me
- This data is at least 6 months old
- This in one data point, I've seen others who don't paint as bleak of a picture
The recent Bank of Canada rate cut is going to add further fuel to the fire and I am curious to see where all this leads.
UPDATE: Corrected my interpretation of first chart based on a Redditor's comment.