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Rob is taking a much-deserved break this week. While he’s away, we’ve collected some of the top real estate stories by our investing and personal finance writers. Always a popular topic with our readers, we’ve seen growing interest as the housing market adjusts to rising rates and recessionary fears. – James Cowan, Investing Editor

Canada’s housing market could crash or soar, but there’s a more likely third option that nobody is talking about

“The most important force to watch is interest rates. The near-zero rates that have helped fuel the massive run-up in Canadian home prices over the past two years are finally on the verge of turning higher. If the Bank of Canada tightens policy as expected, today’s red-hot real estate prices could soon face the cooling impact of higher borrowing costs.

Everyone can spin a scenario about how this clash of forces will turn out. But one possibility that gets surprisingly little attention is the prospect that the market could do something it hasn’t done for a long time – sit still.”

Five signs Canada’s housing market is completely bonkers

“For more than a decade, the most pointless exercise in personal finance has been questioning the rise of house prices. In that time, we’ve had a global financial crisis and two years of a pandemic. Housing ate it all up.

We began 2022 with a new all-time high for average resale house prices that was built on double-digit increases from year-earlier levels. Does this extreme growth make sense?”

How far do housing prices need to fall before the Bank of Canada stops raising interest rates?

“The key, though, is what central bankers deem to be the greater danger – a potential recession or the risk that inflation could become embedded in the economy.

If the past year has taught us anything, it is that central bankers are struggling to stay ahead of inflation. In both Canada and the U.S., prices are rising at their fastest clip in decades.”

Here’s the income you need to afford rent in major Canadian cities

“With the average home price in Canada hitting a record $748,450 in January, Canadians in many parts of the country may find the math of buying versus renting makes for a compelling argument in favour of renting. But another part of the renting equation is likely stumping a growing share of tenants: the comparison between market rents and their own incomes.

In many major cities and even some smaller centres across the country, Canadians would need to make at least $70,000 to afford the average asking rent on a one-bedroom apartment without spending more than 30 per cent or more of their before-tax income on shelter costs, a Globe and Mail analysis found.”

‘It’s a dog-eat-dog world’ as Canada’s housing cool-down helps ignite rental market wars

“The average asking rate on vacant units available on, a rental listings site, reached $1,888 a month in May. That was up more than 10 per cent from a year ago and nearly 4 per cent from April, the steepest monthly increase since May, 2019, according to a monthly analysis of listings compiled by Bullpen Research & Consulting Inc.

In Vancouver, which topped the ranking of most expensive rental markets, the going rate for a two-bedroom unit in June is $3,495, up 24 per cent from the same month last year. In Toronto, renting a two-bedroom unit now costs around $3,000 a month, up more than 21 per cent from a year ago.”

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