The idea that Canadian residential real estate prices are rising at an unsustainable pace is no longer just a subject for Twitter rants and COVID-era chats with family. The international media are paying attention.
The New York Times described “a soon-to-burst real estate bubble.” Reuters declared “Canada’s red-hot housing market has become a bonfire.”
But while many Canadians worry, the government of New Zealand — a country often likened to Canada for its soaring home prices — is attempting a solution by making it harder to get a mortgage. There’s little doubt Bank of Canada officials are keeping a close eye on the New Zealand experience. There are some here who say we should follow suit.
Asked directly at his most recent news conference last month whether Canada would adopt the New Zealand plan, Bank of Canada governor Tiff Macklem appeared dismissive, implying getting the economy back on track after the pandemic recession was more important.
Economy needs growth
“Do we need measures right now with respect to housing?” said Macklem. “Right now, the economy is weak, we’re just out of the second wave. I think we need the support — we need the growth we can get.”
Just before that news conference, Macklem had told an Alberta audience there were “early signs” of overheating in the residential property market as some people seemed to be buying based on the assumption prices would continue to rise. However, much of the pressure was also due to people looking for more space during COVID-19 lockdown measures, he said.
Monday’s latest data from the Canadian Real Estate Association will offer a fresh reading on whether the property boom is slowing.
Later today, the Bank of Canada is expected to announce it is holding interest rates steady at record lows, something critics here and in New Zealand say has helped inflame house prices, and not just in big cities. With signs the global economy is heating up, those concerns may intensify.
It is the fear of speculative investment in housing — based on high demand, low rates and rising prices — that has prompted action from the New Zealand government and the Reserve Bank of New Zealand (RBNZ), the Kiwi equivalent of the Bank of Canada.
After COVID-19, “the availability of affordable housing — that was the No. 2 issue identified as being most important,” national pollster Emanuel Kalafatelis told Radio New Zealand last weekend.
But, for the central bank, a more important concern is the effect on the entire economy if house prices are allowed to continue to soar only to come crashing down once interest rates begin to rise.
“We are now concerned about the risk a sharp correction in the housing market poses for financial stability,” RBNZ deputy governor Geoff Bascand said last month. “There is evidence of a speculative dynamic emerging with many buyers becoming highly leveraged.”
Fear of property ‘fire sales’
In an attempt to prevent a speculative bubble from growing, the RBNZ raised the minimum required for mortgage down payments on March 1, and will raise them again on May 1, including even stricter borrowing requirements for investors.
“A growing number of highly indebted borrowers, especially investors, are now financially vulnerable to house price corrections and disruptions to their ability to service the debt,” said Bascand, who is also in charge of financial stability at the central bank. “Highly leveraged property owners, in particular investors, are more prone to rapid ‘fire sales’ that potentially amplify any downturn.”
As of May, most buyers who plan to live in their home will be required to provide a down payment of 20 per cent. Investors will need to put down 40 per cent.
WATCH | Rising demand for single-family homes during pandemic:
Jordan Dupuis, a New Zealander who came to Canada to complete a master’s degree in political science and stayed here to work, sees many parallels between the two countries, including prohibitive prices for young people who don’t already have a stake in the real estate market. Unlike Canada, New Zealand banned most foreigners from buying in its housing market back in 2018.
Dupuis, who lives in Toronto, said housing affordability seems to have become more of an issue in New Zealand. However, there’s a similar large “gap between average incomes and the average house price,” he said. Here in Canada, Dupuis used to own a house but sold it in favour of renting.
“The prospect for getting back into the market is very difficult right now,” he said.
No easy fix
Garth Turner, a business journalist, financial adviser and former federal cabinet minister who has long been critical of Canada’s heated housing market, says he believes this country will eventually be forced to follow New Zealand’s lead.
“We’re going to have to do something about this because the average family can no longer afford the average house, not just in Toronto and Vancouver, but in Owen Sound and Squamish and Halifax,” said Turner, author of a book and blog titled Greater Fool: The Troubled Future of Real Estate, where he warns about a potential sharp decline in real estate prices.
So far, the great property crash has not happened in Canada, but Turner says with prices and borrowing climbing ever higher, an eventual rise in rates could have the kind of effect the RBNZ is worried about in New Zealand.
“This is a ticking time bomb in Canadian society right now,” Turner said in an interview.
One of the problems with the New Zealand plan is that while it may act to calm the soaring market, higher down payments are one more barrier making it difficult for young buyers to get a home of their own.
As Jordan Dupuis observed, whether in New Zealand or in Canada, putting a lid on home prices when interest rates are so low, when everyone wants a little more space and people with money are willing to bid prices up, is not a trivial task.
“If it had an easy fix, we would have fixed it by now,” he said.
Follow Don Pittis on Twitter @don_pittis
U.S. confirms it will accept Canadian travellers with mixed vaccines – CBC.ca
Canadians with mixed vaccines and U.S. travel plans can breathe a sigh of relief tonight.
Following weeks of speculation, the United States confirmed late Friday it will accept mixed vaccines when new rules kick in on Nov. 8 requiring that foreign travellers entering the U.S. be fully vaccinated.
Individuals inoculated with any combination of two doses of a COVID-19 vaccine authorized by U.S. regulators or the World Health Organization will be considered fully vaccinated, the U.S. Centers for Disease Control and Prevention (CDC) told CBC News.
WHO-approved vaccines include Moderna, Pfizer, AstraZeneca and its Indian-made counterpart, Covishield. So travellers with any combination of these vaccines will be allowed to enter the U.S.
The CDC does not recognize mixing COVID-19 vaccines but said it updated its guidance to reflect growing global acceptance of the practice.
“While CDC has not recommended mixing types of vaccine in a primary series, we recognize that this is increasingly common in other countries so should be accepted for the interpretation of vaccine records,” CDC spokesperson Kristen Nordlund said in an email.
Millions of Canadians have mixed doses of COVID-19 vaccines. When the U.S. recently announced it would impose a vaccination requirement for travellers entering by both land and air, many Canadians with mixed doses worried they might soon be barred from entering the country.
“We felt kind of blindsided,” said snowbird, Ingrid Whyte of Toronto. Following Canadian government guidance, she and her husband, John, each got one dose of Covishield and a second dose of Pfizer.
“We did everything that we were supposed to do in terms of getting vaccines,” Whyte said.
The couple had booked a flight to Florida for Nov. 17, but cancelled it due to concerns over their mixed vaccines. They’re now relieved to hear their vaccine combination won’t be an issue when entering the U.S.
“We are thrilled,” Whyte said. “I wish it could have been a little sooner. It would have allowed people to plan a little bit more effectively. But in the long run, it’s great news.”
It’s also good news for Petar Sesar of London, Ont., who has a mix of Moderna and Pfizer.
Sesar’s fiancée, Mara Bakula, lives in Cleveland. Sesar welcomed news this week that the U.S. land border will reopen on Nov. 8 to non-essential travellers, as he prefers to drive instead of fly to Cleveland.
However, he worried he might have no U.S. travel options come Nov. 8 if the country rejected his vaccine mix.
“That was a very scary moment,” he said. “It felt like house arrest of sorts, like now I [may] have no option.”
Earlier this year, the CDC stated online that a mix of two mNRA vaccines, Moderna and Pfizer, would be accepted in “exceptional situations.” But Sesar didn’t rest easy until he learned that the CDC had approved his exact combination.
“It is unbelievable,” he said. “It is such a relief. I share the relief with millions of [Canadians].”
Where does the U.S. stand now on mixed vaccines?
Canada updated its vaccination guidelines in June to recommend mixing COVID-19 vaccine doses based on emerging research that found it was both safe and effective.
Meanwhile, the CDC still maintains that “data on the safety and efficacy of a mixed-product series are limited.”
But that could change.
The U.S. recently conducted a study exploring the effectiveness of using a different COVID-19 vaccine as a booster shot.
Canadian politicians warn of political violence after U.K. MP is stabbed to death – CBC.ca
Shocked and saddened by the killing of a long-serving British MP on Friday, Canadian politicians say the threat of a similar incident in Canada appears to be growing.
David Amess, 69, was fatally stabbed around noon on Friday while meeting with constituents in Leigh-on-Sea, a town about 62 kilometres east of London.
The Conservative lawmaker had been a member of Parliament for 38 years.
“The MP who was murdered was doing something that we all do as members of Parliament,” said Lisa Raitt, a former Conservative MP and cabinet minister.
“When it’s part of your job, and a fundamental part of your job, it really shook me up.”
For Canadian politicians who have faced harassment and threats of violence, Amess’s death was a startling reminder of the danger that can come with serving as an elected official.
“News like this … I saw this and it just really hit me in the gut,” said Michelle Rempel Garner, the Conservative MP for Calgary Nose Hill.
Police in the U.K. have arrested a 25-year-old man in connection with Amess’s death. He has not been identified.
Rempel Garner said she’s experienced multiple instances of public harassment and received a death threat at her office during the summer election campaign. She said the political climate in Canada is experiencing an escalation of vitriol unlike anything she’s seen before in her 10 years as an MP.
“This last campaign, for me, I have never felt so unsafe,” Rempel Garner told CBC News. She said the next Parliament should do more to ensure the safety of its members.
“Something has changed and it has not changed for the good.”
‘Intensity’ of violence growing
The summer election campaign was marred by repeated incidents of violence and vandalism targeting candidates from across the political spectrum. Prime Minister Justin Trudeau was pelted with gravel at a campaign stop in London, Ont. as anti-mask and anti-vaccine protesters doggedly followed his campaign.
Far-right extremist groups were also said to be more active than in any prior campaign.
“I’m pretty sure that the same groups of people that were attacking the prime minister on the campaign trail were the same people that were after me on the campaign trail,” Rempel Garner said.
Barbara Perry, a criminology professor who studies extremism at Ontario Tech University, said the campaign made it clear that the threat of political violence has become very real in Canada.
“The pattern is not new. I think the intensity and the breadth of the problem is different and changing,” Perry said.
She said that while women and people of colour have long faced serious threats of violence in the political sphere, that danger appears to be more widespread now.
“It seems as if that has broadened out to represent a risk to virtually anyone who runs for office or holds office now,” Perry said.
“I don’t know if it’s social media, I don’t know what it is,” Raitt said. She described the shift in tone as an “undercurrent of anger and a lack of respect for the job that’s being done.”
Former MP says better security needed at local offices
Raitt said she began taking extra safety precautions about halfway through her time in office, which ran from from 2008 to 2019. Those precautions included installing a panic button at her constituency office and rearranging the space to create obstacles that would make an attack more difficult.
She said those measures were meant to help protect her staff during visits from “very angry people who wanted action immediately.”
I’m no longer a sitting MP – but tragedies like this still send a chill through me. <a href=”https://t.co/mVo8zuL57f”>https://t.co/mVo8zuL57f</a>
Raitt said current MPs would be wise to focus on security at their local offices rather than on Parliament Hill, where security is much more robust.
Perry also laid some blame at the feet of political parties and politicians. She said the embrace of attack-style politics may be fuelling some of the anger that is now threatening politicians themselves.
“The parties themselves have escalated the personalization of issues, blaming individual politicians rather than parties or processes,” she said.
“Even politicians themselves have to be very careful in their language so as not to enhance the kind of polarization that can lead to this sort of hostility and violence.”
Horse race marks Sydney’s emergence from long COVID-19 lockdown
Thousands of Sydney residents flocked to a prominent horse race on Saturday, as Australia’s biggest city emerges from a strict COVID-19 lockdown and the nation begins to live with the coronavirus through extensive vaccination.
Up to 10,000 fully vaccinated spectators can now attend races such as The Everest https://www.reuters.com/lifestyle/sports/horse-racing-third-time-lucky-nature-strip-everest-2021-10-16 in Sydney, Australia’s richest turf horse race, and the country’s most famous, Melbourne Cup Day, on Nov. 2.
New South Wales State, of which Sydney is the capital, reached its target of 80% of people fully vaccinated on Saturday, well ahead of the rest of Australia.
“80% in NSW! Been a long wait but we’ve done it,” New South Wales Premier Dominic Perrottet said on Twitter.
The state reported 319 new coronavirus cases, all of the Delta variant, and two deaths on Saturday. Many restrictions were eased in New South Wales on Monday, when it reached 70% double vaccinations.
Neighbouring Victoria, where the capital Melbourne has been in lockdown for weeks, reported 1,993 new cases and seven deaths, including the state’s youngest victim, a 15-year-old girl.
Victoria is expected to reach 70% double vaccination before Oct. 26 and ease its restrictions more slowly than New South Wales has, drawing criticism from the federal government on Saturday.
“It is really sad that Victorians are being held back,” said Treasurer Josh Frydenberg.
Australia is set to gradually lift its 18-month ban on international travel https://www.reuters.com/world/asia-pacific/covid-19-infections-linger-near-record-levels-australias-victoria-2021-10-14 from next month for some states when 80% of people aged 16 and over are fully vaccinated. As of Friday, 67.2% of Australians were fully inoculated, and 84.4% had received at least one shot.
The country closed its international borders in March 2020, since then allowing only a limited number of people to leave or citizens and permanent residents abroad to return, requiring them to quarantine for two weeks.
Australia’s overall coronavirus numbers are low compared to many other developed countries, with just over 140,000 cases and 1,513 deaths.
(Reporting in Melbourne by Lidia Kelly; Editing by William Mallard)
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