This week started with an unusual apology. Evan Siddall, the president and chief executive of the Canada Mortgage and Housing Corporation, took to Twitter to acknowledge that last year the federal agency made a mistake when it predicted that the pandemic-induced economic collapse could bring home prices down as much as 18 percent.
Instead, of course, Canada is talking again about whether most of the country is in a real estate bubble that is about to erupt. In Vancouver last month, the benchmark price for detached homes rose 13.7 percent from a year earlier, reaching 1.6 million Canadian dollarsIn the Toronto area the average selling price for detached houses increased by 23.1 percent over the same period, and a composite price that included all types of homes above $ 1 million.
Many parts of the country have a seller's market, even in times of economic need for many. After my mother died earlier this year, I was surprised to learn that bidding wars, something I associated with Toronto and Vancouver, were now common in my hometown, Windsor, Ontario, for the sale of even relatively modest homes like hers. In my neighborhood in Ottawa, a city that sold a record number of homes last month, there is little time before "for sale" signs are plastered with "for sale" signs. sold 'stickers.
But the pandemic didn't start that way. In his Twitter posts, Mr. Siddall noted that the real estate market had contracted sharply during the first months of the crisis.
About a quarter of Canadians received emergency income support after their jobs were suspended due to closure, large numbers of Canadians delayed their mortgage payments, and Mr. Siddall's agency stepped in to buy $ 150 billion in mortgage notes to keep the market alive. Plus, in many places, according to Mr Siddall, prices were already unsustainable.
A report from his agency shows why – despite those factors – the market shot up instead of slogging.
One factor is that the pandemic did not hit the earnings of high-income people as hard as that of others. In Ottawa, Montreal, Toronto and Vancouver, the report found, house price increases were most pronounced for more expensive homes. People with higher incomes are less affected by unemployment because they usually have jobs that can be done remotely.
They were also able to save more than usual as they spent less due to travel and shopping restrictions. Coupled with ultra-low mortgage rates, homes became an attractive target to spend that money.
Another reason why demand increased, the report found, was that when the market neared a standstill at the start of the pandemic, it created pent-up demand that was unleashed later last year. Buyers quickly outnumbered sellers in the marketplace in many regions, the report concludes – a perfect situation for sellers.
Mr. Siddall, who will soon hold his already extended term of office at C.M.H.C. is not a favorite in the real estate industry. Many of the people in the business hated its agency's tightening of the qualifying mortgage insurance rules it sells to banks for loans to heavily indebted homebuyers. And many accuse him of being a bummer who has deterred buyers with his warnings.
Last year, when he made the wrong market forecast, Mr. Siddall said he had a duty to warn young Canadians of the financial dangers that a drop in house prices, a rise in interest rates and rising personal debt can bring.
While admitting his prediction error, Mr. Siddall was no less cautious about the future this week.
"Times were uncertain and I felt a house price warning was justified," he wrote of last year's caution. "Today we remain very concerned."
Rescue teams combined to combat heavy seas and high winds and rescue all 32 crew on board a Nova Scotia scallop trawler that eventually sank after a fire.
Defense attorneys failed in their attempt to keep a man from being held criminally responsible because of his autism spectrum disorder for using a rented van to kill 10 people in Toronto and injure 16 others. The legal move angered many in the autism community and was largely rejected by a judge when she convicted the man of murder and attempted murder.
Well-known hockey author and journalist, Roy MacGregor, looks back on the life of Walter Gretzky, Canada's most famous hockey dad, who died this week.
The icy winter shores of Lake Huron in Ontario's Bruce County don't seem like an obvious place to go surfing. But for some, its shortcomings are more than made up for by the strong winds and big waves it offers.
Last weekend, 35 top women's hockey players from Canada, the United States and Europe finally took to the ice for their first competitive matches against women since February 2020.
Times critic Natalia Winkelman discusses 'The Walrus and the Whistleblower', a documentary about a former trainer's attempts to free a walrus named Smooshi from a water park in Niagara Falls, Ontario.
Born in Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa, and has reported on Canada for The New York Times for the past 16 years. Follow him on Twitter at @ianrausten.
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