Canada’s housing market cooling off
The CREA says a cool-down in the national housing market is happening in advance of new mortgage rules set to come into effect April 19th. Here in BC there was a heavy drop in activity, partly offset by a Toronto market that’s still hopping. It will be interesting to see if this is a trend, or a blip caused by the winter games.
Meanwhile, the number of new listings — an indication that homeowners are looking to capitalize on demand — climbed 2.4 per cent, marking the fifth straight month that housing supply grew. The amount of housing inventory in February stood at 5.2 months, well below where it was a year ago, at 8.8 months, but on par with 2008 levels.
“Headline price increases are drawing new supply to the market, and so that’s taking some steam out of the market,” said Gregory Klump, CREA’s chief economist.
The average price of all homes sold in February through the MLS system was $335,655, CREA said, up a robust 18.2 per cent from a year ago.
However, CREA said the gain was smaller than in the past four months — down from the January increase of 19.6 per cent — and future increases are expected to become “further subdued” in the months ahead.
“Time will tell how normal the market becomes, but I think there are pretty clear signs that some self-correcting mechanisms are starting to take over and lead to a calmer market, compared to what we saw in late 2009,” said Douglas Porter, deputy chief economist at BMO Capital Markets.
Joycer points out that RBC has also released their affordability report, you can read the PDF here. They make some comments specifically about the BC market:
RSS 2.0 comments feed. Both comments and pings are currently closed.While still below their recent cyclical peaks, all RBC measures stand well above long-term averages. Such poor affordability levels represent an element of risk that could weigh heavily on markets when interest rates start rising.
March 15th, 2010 at 9:47 pm
No matter how far it falls they will never admit that there was a bubble. Denial is the name of the game. You can’t expect politicians or the mainstream media to discredit themselves.
March 15th, 2010 at 9:52 pm
If you fart in a balloon it won’t float away
Trust me
March 15th, 2010 at 10:03 pm
Any reference to 2008 should make Realtors fill their diapers.
March 15th, 2010 at 10:10 pm
The market is cooling because all the rich foreigners (Canadians) are buying in the US.
Half-price homes? Canadians pounce on the Sunbelt.
March 15th, 2010 at 10:11 pm
Look at that: Rent to Own!
http://vancouver.en.craigslist.....82089.html
Developers are exploring rental business. Wow.
$1800 for 3 br in Coquitlam, end of GVREB geography, close to West Coast Express. What a joke. I rent 2 year old 3br+den duplex in Marpole for $1900.
March 15th, 2010 at 10:14 pm
Here’s another article: Canadians’ net worth grows
But read the text for the real story:
Uh oh.
March 15th, 2010 at 10:31 pm
Mar 11, 2010 = 13551
Mar 12, 2010 = 13609
Mar 15, 2010 = 13755
March 15th, 2010 at 10:46 pm
This is interesting information, but we have been duped before. I will start the ‘fuzzy feeling’ only when I see my favorite number again: 20,000.
Once we hit that number of listings in 2008 all hell broke lose.
It does feel nice, though, to NOT WORRY at night about the mortgage debt…
Regards
arit
March 15th, 2010 at 10:50 pm
@Inventory: I think listings are at same level and slowing down compare to last year and sales are up following more selections and oppertunities.If we follow CREA’S guidance I think Olympics vistors from Ontario have decided to stay here for rest of their life that’s why Van RE is taking a clear lead over Ontario.Good weather in beautiful city of this world,Beautiful people include bears.
Thanks bears!
Slowly, slowly, IN.
Kite it up Vancouver!!!!!
March 15th, 2010 at 10:56 pm
“Vancouver is the only city in this world that is almost hundred percent wheelchair accessible include buses trains and low rise-high buildings”-.Mayor Sam Sullivan. (former mayor of Vancouver, British Columbia, Canada)
March 15th, 2010 at 10:58 pm
Post Olympic Hangover + Rising Interest Rates + Record Debt Loads + HST + Increase Taxes Overall + Inventory Rise + Unemployment + Global Double Dip Recession = The Perfect Storm.
Ya nutslaps, even Clooney parished in that flick!
March 15th, 2010 at 11:01 pm
For those of you wanting to give your delusional house-buying friends and family an excellent preview of things to come in Canada in the near future, this is by far the single best explanation of the cause (and aftermath) of the US house bubble I’ve ever heard:
http://www.thisamericanlife.or.....l-of-Money
Click on “stream episode” to listen for free. It’s an hour long, but well worth it.
March 15th, 2010 at 11:02 pm
Hey Bears,
You have been overly excited about seasonal inventory growth. This rise in listings is just some pent up listings left over from the Olympics.
Each time you guys get this excited, you get screwed over by government intervention. Remember 2008/2009? You were all counting how much money you saved by not buying after each monthly report; you were cheering on the shelving of new units as credit tightened; and you were laughing at those trying to get out of their pre-sale contracts.
Haha, your excitement will now jinx you again…its called karma boys and girls and you hoping for a crash to you can wipe the smug smiles off of bulls will come back to bite you again…
March 15th, 2010 at 11:31 pm
Dr. Know – What preytel could the gov’t do to continue inflating this bubble?
Interest rates to 0.00%?
Back to 40 year mortgages?
Back to zero down?
You seem to know so much, tell us what they’ll do? Enlighten us! Us, the poor forenters, lost in a world of cash savings, vacations, cheap housing costs and zero debt, please save us!
March 15th, 2010 at 11:38 pm
Dr. Know:
Doctor this…
“Let not him that girdeth on his harness boast himself as he that putteth it off.”
regards
arit
Context Disclaimer: arit is not religious – but has military background.
March 15th, 2010 at 11:43 pm
The Cons are barely keeping up their guise of “fiscal responsibility”, there is no way they are going to pull out stimulus guns to bail out home owners until it has dropped a MASSIVE amount. Only then would it be politically feasible.
March 15th, 2010 at 11:46 pm
oh yeahh nutslaps! canuck dollhair rising faster than fart in balloon! carney looking for more stimulass! CMHC own granville islands and pay Drackens’ wife tenure! suck of gove tit nutbags cause cant’ get it up both ends! look for coming
“the next leg up”
March 16th, 2010 at 12:57 am
(US) Mortgage delinquencies at historic highs
http://moremoney.blogs.money.c.....ric-highs/
” Rising sales, largely spurred by first-time buyer credits, have given people hope that the beleaguered housing market has finally hit bottom and is even showing signs of life. It’s been impossible, however, for me to get excited about this, considering that the number of people falling behind on their loan payments is growing, not shrinking. Unemployment continues to produce new delinquencies, and it’s been many quarters now since we were talking only about subprime mortgages. No, delinquencies are hitting regular old fixed-rate mortgages to borrowers with good credit, too. ”
Hrmmm sounds kinda familiar? Foreshadow(and closure) of what’s ahead.
March 16th, 2010 at 4:28 am
@Starving Artist:
RE dropped 20% in Calgary and Edmonton from mid-2008 until the end of 2009 and neither the Alberta nor Federal governments even had anything to say about it.
There will be no homeowner bailouts of any kind because:
1. The governments only care about the banks which are already bailed out. The US “bailouts” are for the benefit of the banks, not homedebtors.
2. The Feds and BC can’t afford it.
3. Any bailout would be an admission that governments were negligent in allowing the bubble to develop.
4. The Cons would risk alienating their rural base to aid urban (i.e. mostly Liberal/NDP) homedebtors.
Flaherty has already said that people shouldn’t buy houses they can’t afford. Now of course his actions (CMHC easy money) don’t match his words, but you will hear the same words all the way down every time you get squawks from FB’s. It’s an easy way to the Cons to sound “fiscally responsible” at a time when the facts show otherwise. Trust me.
March 16th, 2010 at 6:43 am
@patriotz:
Correction: Alberta started falling in mid-2007 and turned around at the end of 2008, like Vancouver. But they never got back to the 2007 peak, only about 1/2 way.
http://www.chpc.biz/index.htm#PLUNGE
March 16th, 2010 at 9:12 am
http://www.theglobeandmail.com.....le1501678/
March 16th, 2010 at 9:13 am
The report is misleading. It says sales are down in Feb lead by a big drop in Vancouver. Duh. The Olympics were on. My friends in installation/service noted the same decrease in activity. People just didn’t want to be bothered with these things while the Olympics was on.
While I agree that there is a bubble, I hate using one monthly anomaly to prove it. Its going to be a rollercoaster ride for the next few months.
In Apr we get another anomaly: mortgage rate qualification changes. Followed by the HST in June and rate hikes soon after, if not before.
March 16th, 2010 at 9:29 am
British pair faces jail time in Dubai over kiss
One of the least reason that everyone wants to live in Vancouver,You can have sex in yards,bushes,and in Cars.You can smooch your girl while waiting for bus or sky train. Most of people around you will cheer for you as long you keep your hands on hot ass hemp thats the only way to earn whaaaaaaaa on plate forms.
March 16th, 2010 at 9:39 am
It is not just “one month”. It is all of 2010 so far. The 2010 inventory graph is tracking the 2008 inventory graph. Actually, the 2010 graph is more bearish than 2008.
This was the prelude to a crash in 2008 and it will be a prelude to a crash in 2010. Back in 2008 the only drag was high prices. Now you have high prices, tight mortgage lending, rising rates, rising taxes, higher unemployment.
More importantnly, there is no room for government to juice the market this time. Rates are at 0, governments have no money for more stimulus.
It is time for blood in the streets.
March 16th, 2010 at 9:39 am
Long browntown and nutslaps. Experts agreed that the ability is getting worse. Rise in the electricity, transportation and other marginal Foot injury, while the salaries stagnated. Only Dave get pay rise. onehorse said: “The next wave is a reaction to, and begin your ass in cattle.”
March 16th, 2010 at 9:49 am
@VRENGD:Ben Bernanke is in close door meeting today. I think they are planning to reduce interest rates to -.25% .It means Government will pay you .25% interest rates to buy a home for your family.Not a bad speculation at all,nope? but snow storm in usa wiped off the housing stat this month and this real estate agent Crabman from usa has been cought providing misleading information to this forum.
March 16th, 2010 at 11:27 am
Hey suckers, check this out:
The Federal Reserve will continued to keep interest rates near zero for an extended period while pointing to increased momentum in the economy’s recovery.
No rate hike. I told you fools, the central banks have no BALLS to raise rates, therefore, real estate rockets higher.
Yeah, vote this post down just because it’s the truth. Bears, take it up the ass!
March 16th, 2010 at 11:30 am
@Supraboy:
Hey SB…that wasn’t the CB for Canada by the way…
March 16th, 2010 at 11:33 am
Kite towards moon is a real nutslap. Browntown posting the formula works the bear. onehorse position higher than that of Kite towards moon ratings. To catch up with honey than vinegar, even bears. This is a horse town is only big enough for each of us. onehorse said: “The Icarus flying too close to the sun died. Whether there is a similar crash, if the real estate in Vancouver trying to kite flying to the moon?”
VANCOUVER IS METH PLAGUE ON EARTH!! GET READY FOR NEXT LEG IN ASS!!
March 16th, 2010 at 11:45 am
@Anonymous: And you think the Bank of Canada has balls to raise rates? Please raise the rates so our canadian dollar can skyrocket to the moon. If the BOC has balls to raise rates, I’d like to see it. That would send fertilizer, coal, mining, gold and silver on a one way rocket to the moon. Better load up boys and girls.
March 16th, 2010 at 11:54 am
taylor192 is correct, didn’t you see all the rich asians and Iranians in the crowds of cheering fans? Anyone who’s anyone knows the rich Chinese and Iranians LOVE their winter olympic sports, DUH.
March 16th, 2010 at 11:57 am
Supraboy is also correct, everyone knows that the Japanese kept their rates at 0% for many, many years. Japanese houses only fell 50% or so, anyone who’s anyone knows that low rates mean house and commodities prices will rocket skyward.
March 16th, 2010 at 12:06 pm
@Supraboy:
Yes you are so right that the gold market is waiting to see what the BoC does with our interest rates. Ever thought for one second the the forex market is already starting to price Canadian interest rates hikes into our dollar. It is expected.
March 16th, 2010 at 12:11 pm
Long Bond dictates rates you moron … new CMHC rules means the int’l bond market dictates how you qualify for a mortgage.
I can’t deal with such stupidity. Why don’t you and your wife “buy three” – pronounced “free”.
March 16th, 2010 at 12:25 pm
Also
US Fed is terminating the program to purchase mortgages in the U.S. (they’ve 1.25 Trillion over the last year) which keeps mortgage rates down. If you don’t understand this it only confirms my “moron” comment.
What happens when C’dn gov’t stops guaranteeing CMHC debt. Which way do you think rates will go when lending institutions and structured debt purchasers have to be compensated for risk without explicit taxpayer guarantee?
March 16th, 2010 at 12:31 pm
Did you read the G&M or NYT article on debt today. What happens when all the gov’ts/corporations/individuals compete to sell their debt? Hint huge supply means you guessed it – cheaper prices. Cheaper bonds mean higher yields – higher yields mean ________ mortgage rates.
March 16th, 2010 at 12:42 pm
@taylor192: I’m not sure where they’re getting a Feb drop in sales. According to the REBGV newsletter there were 2,473 sales total last month. That’s 67% higher than Feb 2009 and near Feb 2008′s 2,676.
@patriotz: I totally agree… when I say massive drop, I mean 40%+, and that doesn’t guarantee any gov’t help, I just meant it would only be on the table at that point. In response to those saying “if prices start to correct the feds will put out a big FTB tax credit” or some other baloney.
And like you said, they’ve been lining up their “told you so” ducks for quite a while. Good old ass-covering
March 16th, 2010 at 12:44 pm
@Supraboy:
Please Mr. Jurock, that’s enough already.
If you don’t stop I am going to call the Simon Wiesenthal Centre and tell them where your dad is hiding.
March 16th, 2010 at 12:46 pm
@Starving Artist:
The drop in sales is MOM. It’s just another way of spinning “there is no bubble here”.
March 16th, 2010 at 12:52 pm
@Supraboy: “The Federal Reserve will continued to keep interest rates near zero for an extended period while pointing to increased momentum in the economy’s recovery.”
Which is exactly what everyone expected.
However the Fed MBS purchase program is ending this month so expect a 50 bps spread (plus or minus) gain between 5-year treasuries and mortgages to develop before June in the USA. The market hasn’t had a chance to value anything for quite a while with these voodoo economics.
And as Anonymous said, the forex market has already priced a 25-50 bps BOC rate rise into our dollar. Dollars move on central bank guidance, well before actual rate changes. Are you really as stupid and poorly-read as you pretend to be? You’re a troll right?
http://network.nationalpost.co.....react.aspx
“Governor Mark Carney and the Bank of Canada surprised exactly no one Tuesday, deciding to maintain the overnight lending rate at 0.25% while again repeating its pledge to keep the rate at the same level until the second half of the year.”
March 16th, 2010 at 2:12 pm
@Starving Artist:
Tax credits are an operating expense and result in a bigger deficit. No room for them, if they were to be made big enough to make any difference. Also too obvious an admission of a bust.
Much more likely, if the Cons want to juice the market one more time, is to go back to looser qualifications for CMHC-insured loans. That’s off the books. But they have to be careful not to get on the wrong side of the bond markets.
Remember again it’s all about the GTA. BC can and will go down in flames, but they want prices in the Toronto area to go down slowly enough that it can be called a correction not a bust. And as I said, their strategy will be to place the blame for anyone in trouble on their own personal decisions, not on government policies.
March 16th, 2010 at 2:36 pm
i can’t believe it…the big crash is about to unfold…
March 16th, 2010 at 3:07 pm
@Kite towards moon: One of the least reason that everyone wants to live in Vancouver,You can have sex in yards,bushes,and in Cars…
Kite, are you a loser who can’t get laid and hopes it will eventually happen if you live/own in Vancouver? Ohh, poor boy…
March 16th, 2010 at 5:28 pm
@Kite towards moon:
I can’t believe your post got voted down for stating the truth. What a joke. Bears are ganging up on you.
March 16th, 2010 at 5:31 pm
@Anonymous: So we’re already priced in on the forex market? You sure? I think it has more to do with rock bottom rates in the US and the rescuing of Greece by the EU.
And if any of you want to compare Japan to North America, give me a break. Japan does not have their own commodities like Canada.
March 16th, 2010 at 5:46 pm
^^^^
Comparisons with Japan are useless as its an apples to oranges comparison. At least they restrict foreign ownership of property so its an insular and locally driven market. We, on the other hand, post a sign on our door that says “Open for Business – Please buy our properties so that locals have no affordable housing.”
And don’t give me this crap about Landcor Data saying only 4% of properties are owned by foreigners. Everyone and their aunt can bring up an example of some place that they know is owner by an American, European or Asian.
March 16th, 2010 at 6:41 pm
Dailies – List || Sold
Vancouver East & West*
New Listings – 99
Back On Market Listings – 2
Price Changes – 33
Sold Listings – 60
Vancouver All Areas*
New Listings – 265
Back On Market Listings – 5
Price Changes – 94
Sold Listings – 164
Looks like the buyers are coming out in droves now eh WOW (aka Not Garth, Fish Taco, Postoblues)?
You see, I told you bears that you jinxed yourself. This Spring is going to see a fantastic sales seasons! Prices have already gone up 20% this year – at least another 10% by the end of the Spring!
March 16th, 2010 at 6:42 pm
KITE TOWARDS THE MOON desperatley needs to get laid and get hooked on phonics and SUPRACHINK im sick and tired of reading your comments. get back on the boat go back home.
March 16th, 2010 at 7:27 pm
Via Mish’s blog: http://americacanada.blogspot......dence.html
Read the whole thing!
March 16th, 2010 at 7:30 pm
Isn’t it ironic that a “self-correcting mechanism” is often a swift kick to the groin. Porter can call it whatever he wants, it will hurt regardless.
March 16th, 2010 at 7:39 pm
@Dr. Know Nothing:
Wow, if a 60% sell/list is what you consider a great day for the cheerleaders then you really are fucked.
March 16th, 2010 at 7:49 pm
@Best place on meth: 38
X Best place on meth Says:
March 16th, 2010 at 12:44 pm
@Supraboy:
Please Mr. Jurock, that’s enough already.
If you don’t stop I am going to call the Simon Wiesenthal Centre and tell them where your dad is hiding.
ReplyCurrent score: 9
++++++++++++++++++++
How in the hell do you come up with these comebacks? Too funny!!!!
March 16th, 2010 at 8:50 pm
An impassioned argument, from an immigrant’s perspective, that demand for Vancouver is and will remain overwhelming, has been archived at VREAA.
“I was one of the unlucky 15 million people born into the city that ranks among the bottom 10 in the annual most-livable cities in the world survey. Then, quite magically, later in my life, I find myself among the lucky couple of million that live in the metropolitan region that is consistently on the top of that same list.”
http://wp.me/pcq1o-BH
March 16th, 2010 at 8:52 pm
Mar 1, 2010 = 12255
Mar 15, 2010 = 13755
Mar 16, 2010 = 13778
March 16th, 2010 at 8:56 pm
@Prca: I keep my girl with me to do the job i want for my pleasure.I just want to make it clear that comment you had response is about freedom of expression,like any other sector sex is also a part of our life for proper growth.In other words, a person should be healthy physically,mentally,and sexually and kissing some one on the street is better than beating someone on the street.You shouldn’t be send to prison for month for kissing.In respect to all that Vancouver is best City to live in you can’t see gay lessbian parade in Dubai,If there is one that would be in life time prison.
By the way,Do you own any condo in Dubai?
I know Donald Trumph and his investors do own a unit or two.Maybe or maybe not this pair in prison for month is one of them.
March 16th, 2010 at 9:03 pm
“That would send fertilizer, coal, mining, gold and silver on a one way rocket to the moon. Better load up boys and girls.”
In terms of the USD yes, but in terms of CAD it would likely stagnate or move down (depending on the commodity).
March 19th, 2010 at 11:34 pm
Homeowners Association Management:- Yes, the market is cooling, because all the Canadians are buying in the USA.