Assessing House Prices in Canada
26 Pages Posted: 22 Jan 2020
Date Written: November 2019
This paper assesses house prices in 11 Canadian Census Metropolitan Areas (CMA) using the borrowing-capacity and the net-present-value approaches. The results indicate that by the end of 2018, house prices in most metropolitan areas are aligned with macroeconomic fundamentals. However, in Hamilton, Toronto, and Vancouver house prices have increased beyond the values implied by the fundamentals.
Keywords: Interest rates, Index numbers, Market interest rates, Financial crises, Interest rate increases, house prices, borrowing capacity, valuation, financial stability, WP, mortgage rate, house price, house affordability, loan-to-value, CMAs
JEL Classification: G1, G12, E37, E01, G21, C43, E31, D4
Suggested Citation: Suggested Citation