The Canadian real estate collapse was rumored to follow the surge in Canadian residential real estate prices. These statistics had made fools out of many analysts who had been calling for a reversal of the market for years. This year alone, costs in Vancouver and Toronto had surged by as much as 20 percent for similar properties over the last year.
The Canadian Real Estate Association announced that year-over-year price growth began to range widely among markets tracked by the index. Greater Vancouver, with +20.56 percent, and the Fraser Valley, with +16.94 percent, gained the largest increases, followed by Greater Toronto with +10.69 percent, according to a feature from the Financial Post;
The Canadian real estate collapse to some degree had been driving by foreign investors and forces behind the demand that had caused condominium towers to start appearing from Halifax to Victoria. From 1986 until 2012, Canada's Immigrant Investor program had offered visas to individuals with a net worth of at least $1.6 million. These individuals had given the Canadian government $800,000 for five years. The project was overwhelmed in 2012 mainly with applications from China. This influx caused a major backlog in the system, as China's economy created millions of millionaires.
As a result, about 1,000 millionaire immigrants were taken off the backlog, and a lawsuit against the immigration department by the group was filed in 2014. This led to the pillars of residential real estate demand being removed. The global economy had slowed the pace of millionaires, and so, the available roster of foreign investors in Canadian real estate had peaked, according to a feature from The Wall Street Journal.
The downturn in oil and gas prices also had a chilling effect on real estate in regional economies in Alberta and British Columbia, but there was a simmering stew that boiled over, as energy and energy services corporations that had been surviving on asset sales faced bankruptcy.
