7 Canadian banks get negative outlook
Standard and Poor’s have downgraded their outlook for 7 Canadian banks from stable to negative.
And what has motivated this downgrade?
High housing prices and consumer debt.
Now you can bet that S&P are aware of the CMHC and the backdoor bank bailout, but when things get this out of balance there is a spill-over effect. If you can’t pay the mortgage you probably aren’t paying the credit card bill either, and there’s no CMHC buying up credit card debt.
“A prolonged run-up in housing prices and consumer indebtedness in Canada is in our view contributing to growing imbalances and Canada’s vulnerability to the generally weak global economy, applying negative pressure on economic risk for banks,” the rating agency stated in its decision. “Growing pressure on banks’ risk appetites and profitability arising from competition for loan and deposit market share could also lead to a deterioration in our view of industry risk.”
The seven Canadian banks with a negative outlook are:
-Bank of Nova Scotia
-Central 1 Credit Union
-Home Capital Group Inc.
-Laurentian Bank of Canada
-National Bank of Canada
-Royal Bank of Canada
-Toronto-Dominion Bank
Full article in the Globe and Mail.
July 31st, 2012 at 12:24 am 1
“…and there’s no CMHC buying up credit card debt.”
Anymore. The CMHC was insuring HELOCs, which everyone used to consolidate debt at super low rates. The government subsidized consumer debt by providing cheap insurance.
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July 31st, 2012 at 1:18 am 2
I heard the term “flow insurance”. Anyone know what it is? It sounds current.
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July 31st, 2012 at 5:53 am 3
Will it make this guy finally STFU?
http://news.nationalpost.com/2012/06/11/harper-tells-europe-it-should-look-to-canada-for-practical-economic-management/
I cringe at the thought that he’ll probably take to the international stage blaming Europe when his fiscal house of cards collapses.
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July 31st, 2012 at 7:08 am 4
The dangers of home renovations: There could be explosives hidden in the walls.
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July 31st, 2012 at 7:09 am 5
The dangers of home renovations: There could be explosives hidden in the walls.
http://www.vancouversun.com/Century+explosives+hidden+Main+Street+house+rattle+neighbourhood/7014335/story.html
(Sorry for double post. Forgot link in first post)
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July 31st, 2012 at 8:37 am 6
Central 1 Credit Union… Quelle Surprise?… Helmut Pastrik is one of those bank economists who has drank the most real estate koolade… Anyone ever notice he sort of look like Telly Monster (Elmo’s Friend from Sesame Street)?
http://www.cracked.com/funny-1003-sesame-street/
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July 31st, 2012 at 9:21 am 7
Anybody else see the “Think” contest winners announced?
http://www.vancouversun.com/business/THINK+Housing+contest+winners+announced/7013989/story.html
At the top of the article, an idea reclaim half of many existing 66 foot wide streets in order to make 10,000 new 33 foot wide homes.
Brilliant! This can cement Vancouver’s top spot for traffic congestion for decades to come. You think traffic is bad now, wait until all those people with daily commute shortcuts that cut through the burbs are forced back onto the main arteries.
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July 31st, 2012 at 9:29 am 8
US bubble now fully deflated in real terms:
http://www.calculatedriskblog.com/2012/07/house-price-comments-real-house-prices.html
Can’t happen here? They said it couldn’t happen there.
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July 31st, 2012 at 9:30 am 9
Shortage of downtown office space means it’s a good time to buy/build commercial properties! Apparently we are now even more like world financial centers like NY, Tokyo, London, etc because commercial property cap rates are down to 5% or under.
http://www.vancouversun.com/business/Does+Vancouver+investment+market+make+building+better+option/7013964/story.html
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July 31st, 2012 at 9:31 am 10
@Crikey:
I don’t think they were talking about changing the width of the roads, just the setbacks. Not that there aren’t other problems, but I don’t think current road widths is one of them.
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July 31st, 2012 at 9:39 am 11
@N:
At a glance, the article I linked to doesn’t clarify, saying the proposal is to “subdivide its standard 66-foot road allowances in two and building houses one half”. Haven’t had the time to look for and read the full report.
And yes – there are surely other problems. Depending on the location, many corner lots are considered to have greater value than comparable inside lots. I wonder how many people with corner lots that suddenly became inside lots would not be lining up for compensation or lawsuits.
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July 31st, 2012 at 9:52 am 12
@Crikey: “You think traffic is bad now”
Nope.
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July 31st, 2012 at 10:07 am 13
And more interesting data on the tapped out Canadian. Very interesting is the note about the significant rise among Canadians in online searching using “bearish” terms…the sleeping masses are definitely wakening.
http://seekingalpha.com/article/741391-canadian-real-estate-and-household-debt
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July 31st, 2012 at 10:26 am 14
@patriotz: I’ve said it before and I’ll say it again:
http://www.youtube.com/watch?v=vKITpVovTAE
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July 31st, 2012 at 10:30 am 15
@Crikey: The first problem that I think of with the street narrowing proposal is with fire regulations– one reason corner lots are highly-valued is because you can put more windows around the side of the house. They often aren’t otherwise allowed due to fire risk– the risk of a fire in the neighbour’s house spreading to your house through a window.
So if you have a corner lot, and a “new” corner lot is created next to you, the new neighbours’ house will be too close to your house, given the fire regulations surrounding side-windows. I bet the city staff will scrap that proposal– interesting, but details make it unworkable.
With regards to Crikey’s concerns about effect on traffic, just make the newly-narrowed street a one-way street. Or make these lots along bike routes (traffic’s already “calmed” on those streets).
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July 31st, 2012 at 10:35 am 16
@Bo Xilai: I wonder if those of us who do our banking at Central 1 members like Vancity should be even more concerned given that the tightening in lending that just went into effect DID NOT apply to credit unions? http://business.financialpost.com/2012/07/12/credit-unions-escape-new-mortage-rules/
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July 31st, 2012 at 10:37 am 17
(oops, didn’t login earlier) I wonder if those of us who do our banking at Central 1 members like Vancity should be even more concerned given that the tightening in lending that just went into effect DID NOT apply to credit unions? http://business.financialpost.com/2012/07/12/credit-unions-escape-new-mortage-rules/
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July 31st, 2012 at 10:47 am 18
8 patriotz Says: “US bubble now fully deflated in real terms:”
Tempting bet. It’s unclear to me if long term rents were distorted by the run-up. Price/rent is bedrock to the financial rationality of ownership, however as a ratio it’s vague on the financial equilibrium of rents against income. Rents might have room for downward movement.
Ownership rates at 65.4% are also still above historic normals so a few balls remain in play. My money is on more declines.
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July 31st, 2012 at 10:55 am 19
@Simpatico:
You seem to be conflating the OSFI regulations, which apply only to federally regulated lenders, with CMHC regulations, which apply to ALL CMHC-insured mortgages regardless of lender (obviously I would think).
I think the change in CMHC regulations is a lot more significant.
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July 31st, 2012 at 11:04 am 20
@Anonymous: Time to write your board members…..
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July 31st, 2012 at 11:06 am 21
Sales to be worst than 2008, all we need is less than 115 today. Come on Vancouver, I know you can do it.
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July 31st, 2012 at 11:38 am 22
@patriotz:
It seems like Flaherty is pushing/encouraging provincial credit unions to convert to federal credit unions, which allows them to “compete better with big banks” (is that true?).
The catch is, once converted to federal credit unions, they’re under the watchful eyes of OSFI. According to the new framework announced few weeks ago:
“Federal Credit Union Conversion Regulations:
This proposed regulation sets out the requirements applicable to the “demutualization” process of a federal credit union into a bank with share capital. This regulation specifies the information that must be included to the conversion proposal to be approved by the Superintendent of Financial Institutions (Superintendent) and members of the federal credit union, and to the subsequent conversion application.
It also grants the Superintendent certain powers that may be exercised prior to the approval of the conversion proposal. These powers include the possibility for the Superintendent to order various measures to the converting credit union to facilitate the members and shareholders’ decision on conversion approval.”
http://www.mondaq.com/canada/x/188700/Financial+Services/New+Framework+For+Federal+Credit+Unions+Taking+Shape
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July 31st, 2012 at 11:41 am 23
@Madashell:
Normally, Paul’s sales number is a little higher than the official one. I would say it is almost a certainty that we have a lower sales than 2008.
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July 31st, 2012 at 11:48 am 24
@Madashell:
The month-end tally of paulB’s daily sale #s tends to be slightly higher than REBGV’s official monthly sales #.
the realtors will likely need to pull off much better than 115 today for official REBGV sales # to be better than July 2008..
we’ll find out in 2 days
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July 31st, 2012 at 12:14 pm 25
Condo prices look like they are going to be way down MoM. They will lead the pack of price decreases now, as desperate sellers try to lower their prices to out-fox their neighbour. That’s the nice thing about condos… if one person lowers the price of their unit, it drags every other identical unit in the building down with it. Since we are at the top of the market, this will happen faster. People with huge unrealized gains will lower their prices quickly to ensure they lock in profit.
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July 31st, 2012 at 12:16 pm 26
@VMD:
Is this because PaulB’s numbers are the daily numbers, and some sales end up getting pulled/cancelled after they are reported? I was wondering about that. Seems like sales could almost end up close to dropping below 2000 this month. Unlikely, but maybe. Maybe we’ve had a lot of buyers with cold feet cancel their contracts.
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July 31st, 2012 at 12:42 pm 27
Will it make much difference if July 2012 has worse sales than July 2008? Nope, but it makes the REBGV press release more awkward if it does…
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July 31st, 2012 at 12:46 pm 28
Oh yeah, forgot to mention that paulb.’s numbers come in slightly higher than REBGV reported because he includes some transactions that REBGV doesn’t. Even if paulb.-reported sales are slightly over the REBGV-reported 2008 levels by 20-30 or so REBGV will still be reporting lower than 2008 this year. To be higher than 2008 REBGV will need to be pushing 200 sales.
And why shouldn’t they? Sounds like they need all the help they can get, and they can probably figure out a way of reporting 200. It’s all good though; the figures are a proxy to what’s actually going on, and any spin/manipulation is becoming less and less potent with every passing month.
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July 31st, 2012 at 1:00 pm 29
I can already imagine the spin:
“July 2012 numbers were slightly lower than July 2008. This is to be expected because we are still in the middle of the global financial crisis, which was caused by the collapse of Lehman Brothers in Sept 2008, and therefore did not affect the the brisk sales of July 2008.”
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July 31st, 2012 at 1:01 pm 30
@Madashell:
(Sales to be worst than 2008, all we need is less than 115 today. Come on Vancouver, I know you can do it.)
So what,the price just won’t drop and hanging tight as long as we keep buying.
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July 31st, 2012 at 1:09 pm 31
@Proud and extremely rich Chinese home owners:
hey proud and rich neighbor, but we all sellin’
wanna buy ours and help fund our retirements and extravagant vacays?
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July 31st, 2012 at 1:11 pm 32
@UnagiDon:
I think they will start using HPI instead of average price. They will say average price were skewed last year.
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July 31st, 2012 at 1:42 pm 33
@ScubaSteve: ” That’s the nice thing about condos… if one person lowers the price of their unit, it drags every other identical unit in the building down with it.”
Lack of differentiation == reduced pricing power, that is.
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July 31st, 2012 at 2:06 pm 34
@patriotz: Where’s Dave to argue it doesn’t matter because people don’t care about “real terms”? *laughing*
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July 31st, 2012 at 2:06 pm 35
@Neighbors of Proud and extremely rich Chinese home owners: China’s wealth is built on nothing but a state-sponsored Ponzi scheme fuelled by massive debt. China’s embrace of capitalism has more similarities to the “Great Leap Forward” than the “Industrial Revolution”.
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July 31st, 2012 at 2:15 pm 36
@Proud and extremely rich Chinese home owners:
Your strong rich asian friends are all running for YVR. Anyone who bought Richmond in the last couple of years is probably just going to default on their huge million dollar house and fly back to China. Five years from now, the Richmond landfill will be full business signs written in Mandarin, and those huge darth vader sun visors.
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July 31st, 2012 at 3:28 pm 37
@gokou3: “Lack of differentiation == reduced pricing power, that is.”
Having easy comparables it is a double edged sword. On the way up it helped pump prices. On the way down it works in reverse.
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July 31st, 2012 at 3:28 pm 38
@35 Bo Xilai
As much as I dislike China for their human rights, environmental record and neighborly policies, their wealth is built on massive debt. European and US Debt. You don’t think trade deficits just happen do you?
When you say state sponsored ponzi scheme, did you mean fractional reserve banking, floating currencies and Q.E. infinity? We’re here on this site because of our disdain for government interference in the market. China is just catching up to what the west has been doing ever since the end of WW2. Enslaving their population in the wealth trap known as F.I.R.E.
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July 31st, 2012 at 3:29 pm 39
@Bo Xilai: “China’s wealth is built on nothing but a state-sponsored Ponzi scheme fuelled by massive debt.”
Massive debt by the western consumer maybe. China is flush with cash.
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July 31st, 2012 at 3:33 pm 40
@Anonymous: “China is flush with cash.”
Not really. Households have savings, but a lot of that has gone into real estate. Chinese businesses, local governments, and state owned enterprises are all highly leveraged.
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July 31st, 2012 at 3:53 pm 41
@T: “their wealth is built on massive debt. European and US Debt. You don’t think trade deficits just happen do you?”
If the US borrows money and buys Chinese goods, new money is created in China to facilitate the production of those goods and that wealth is *real*. Once goods are produced and money changes hands, a transfer of wealth is accomplished. I.e. if the US defaults, you’re not going to see the wages of Chinese workers somehow clawed back. So there has been a lot of wealth created in China.
What is of deep concern is that there has also been a lot of speculative debt created in China, and a lot of malinvestment. Those losses will ultimately be paid by households somehow. So you have dishonest accounting. It’s kind of like how governments in Canada keep taxes very low and run large deficits as expenditures increase. We all know it can not continue, yet few people act according to the implications. They behave as if the status quo will continue indefinitely.
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July 31st, 2012 at 3:57 pm 42
@T:
speaking of “the wealth trap known as F.I.R.E.”
news today:
BCSC alleges million-dollar fraud by financial adviser
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July 31st, 2012 at 4:00 pm 43
my guess
73 sales today
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July 31st, 2012 at 4:04 pm 44
@VMD:
Just looking into her face, I wouldn’t give her to park my bike not to mention to mange some assets.
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July 31st, 2012 at 4:11 pm 45
@Anonymous:
Just wait until all the Special Purpose Investment Vehicles blow up. These are creations of the Chinese municipalities for borrowing purposes. They are generally “backed” by marginal assets. They were created because municipalities are limited in the borrowing abilities. All that “flush with cash” will become cash that’s flushed down the toilet…
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July 31st, 2012 at 4:45 pm 46
@rp1:
Inflation keeps going and cash will be worth shit…
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July 31st, 2012 at 4:53 pm 47
Is this some sort of sarcastic and cynical pessimist contest? The more sarcastic, cynical and pessimistic the comment, the more up-votes?
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July 31st, 2012 at 4:59 pm 48
Is this some sort of sarcastic and cynical pessimist contest? The more sarcastic, cynical and pessimistic the comment, the more up-votes?
_______
Its as realist contest, not a pessimist contest? If you choose to stick you head in the sand in lotus land, that is your prerogative….the rest of us are just trying to figure out how to walk over you…
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July 31st, 2012 at 5:03 pm 49
@ Anonymous. What a horribly cynical outlook on the contributors and readers of this blog! I voted you up for it.
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July 31st, 2012 at 5:05 pm 50
@Anonymous:
As opposed to what, the mainstream media? Where only the most dishonest, uber-optimistic, real-estate-only-goes-up, FIRE industry pumping “news” gets published?
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July 31st, 2012 at 5:14 pm 51
Update:
The masses (en mass) will not hit the panic button until we breach 12MOI city wide (I expect this to happen before year end) and prices are already off 20% (basic averages).
It’s coming you muppets, I told you it would be worth the wait.
Don’t be shocked to see the simple average fall 50% over 24 months.
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July 31st, 2012 at 5:28 pm 52
New Listings 186
Price Changes 137
Sold Listings 106
TI:19188
Weekly office stats up http://www.paulboenisch.com
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July 31st, 2012 at 5:35 pm 53
Thanks Paul….
Well, listings pace is somewhat tepid….at this point, we need some FEAR to permeate the seller/specuvestor psyche…..what will be the trigger? Or will the Chinese water torture method do the trick….hmmm.
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July 31st, 2012 at 5:37 pm 54
#47 @Anonymous: “Is this some sort of sarcastic and cynical pessimist contest? The more sarcastic, cynical and pessimistic the comment, the more up-votes?”
The problem today is that no matter how cynical you are, it never seems to be enough.
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July 31st, 2012 at 5:40 pm 55
@Romeo Jordan:
The masses (assuming you mean the majority of homeowners) won’t be participants in the upcoming bust just as they weren’t in the US.
As in the US, the participants will be speculators, HELOC addicts, and maxed-out recent buyers. And only the first group will sell when prices are seen to be falling. The last two will hold on to their houses to the bitter end.
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July 31st, 2012 at 5:46 pm 56
Hi Patriotz,
I think buying fear has seeped into the market…but sellers are still (by and large) oblivious…by sellers, I mean folk that think they are long term investors but are not, and when they realize that they are down 15% top line and that this translates into a total equity wipeout (and some residual debt to boot, after they sell) then they hit the bid and head for the exits like a bunch of fucking lemmings.
What are you, some kind of muppet? I figured you knew this already.
Get with the program.
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July 31st, 2012 at 5:52 pm 57
@patriotz: Yup. I’m hesitant to make a prediction, but anyone expecting a flood of oh-my-god listings will be disappointed.
In my bailiwick, the strathcona bunker bellwether (still here, for now; $859k asking) appears to have been pulled. Another couple of Strathcona properties have dribbled off the market, either sold or pulled. There are still more red dots than six months ago, but things are looking pretty stagnant.
Small consolations: all 5 “Strathcona Edge” properties are still listed, and this ridiculous $1.5e6 listing continues to languish. Plus, there are a lot of houses being fully gutted and renovated within earshot; one wonders how many of them will be listed this fall.
It’s going to be a long, slow bleed. Painful, too, although not for those of us who saw it coming.
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July 31st, 2012 at 6:13 pm 58
July 2012 Sales:
YoY: -16%
MoM: -9%
Months Inventory:
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July 31st, 2012 at 6:21 pm 59
I bet REBGV posts their stats late Friday to avoid any weekday press, hoping that the story sort of goes away over the weekend, or gets picked up by weekend news (that no one watches).
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July 31st, 2012 at 6:22 pm 60
Thanks VMD, great stats.
Bummer….sales not low enough, listings not high enough…..
YET!!!
But it’s on its way.
Its still many moons before we can say “I told you (fucking lemmings) so….”
It will come. And it’s going to taste great, a dish best served cold.
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July 31st, 2012 at 6:27 pm 61
@VMD: She did’nt swindle the money… she ate it!
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July 31st, 2012 at 6:31 pm 62
@Turkey: I’m in the area as well and am seeing the same thing. The guttings/renovations are certainly happening, probably with visions of flipping dancing in the owner’s heads. I hadn’t noticed the “California” inspired one listed at 1.5 & change. Looking at the listing, it would be over priced at half that.
Many people in the Strathcona area seem to have been there for some time; that’s just my impression. It almost seems like some of them are floating trial balloons to see what they can get. If they can’t have the early retirement, so be it.
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July 31st, 2012 at 6:33 pm 63
Retirement dreams for many wealthy land holders will be dented in a handful of months and smashed to smithereens in a handful of years.
It’s never different this time. Tattoo that on your forearm McLovin.
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July 31st, 2012 at 6:35 pm 64
@HipsterBear:
Flow Insurance?
Sounds like a feminine protection product…
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July 31st, 2012 at 6:40 pm 65
The daily Garth Turner post is proof positive the man is a hypocritical idiot, no, out and out liar.
Three or so years of his prognostications, virtually all fundamentally correct yet almost none coming to fruition.
From doom and gloom, selling generators and squirrel recipes on his blog to suggesting a slow minor melt is the worst to be expected.
Today he is predicting the demise of the teaching profession because of a 20million budget shortfall with the Toronto School Board.
(Mr Turner, school boards are virtually the ONLY public entities NOT allowed to run deficits and thus that ‘shortfall’ equates to some of the best money management within the public purse. Unlike the massive deficits and public debt currently serving YOUR pension, you stupid fucking hypocrite and deceitful liar. I’d mail your books I bought from you back, except I already burnt them!! Asshole!!)
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July 31st, 2012 at 6:45 pm 66
@chilled: Yet you still read his blog?
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July 31st, 2012 at 6:50 pm 67
@xyz:
“Yet you still read his blog?”
Yes, rarely. It’s tough to be a contrarian in a world of conformists, but what pisses me off more than idiot hypocritical blogging are conformists who migrate en masse to the ‘group think.’ Sorta like THIS blog.
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July 31st, 2012 at 6:54 pm 68
@chilled: Well blog’s ARE opinion pieces… so read em or not… but I don’t think you need to sling mud on em.. IMHO
Intelligent people can process what they read and discard the crap, others… who cares?
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July 31st, 2012 at 7:07 pm 69
@xyz:
Whattareyou? High?
Have you been paying attention to THIS blog?
Sorry, you’ve confused me with the first person on VCI who has critiqued someone connected to the Realturd® Ponzi scheme.
If you thing GT is beyond reproach, may I suggest you kiss my hairy ass.
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July 31st, 2012 at 7:11 pm 70
@chilled:
“what pisses me off more than idiot hypocritical blogging are conformists who migrate en masse to the ‘group think.’ Sorta like THIS blog.”
I can handle being called a lot of things, but a “group thinker” is something I have to take objection to. I pride myself on my independence of thought. My comments on the urban development of Vancouver, Little Mountain, urban renewal, demolishing the viaducts, gentrification, race issues (gentrification led by non-whites–very unusual in other places/times but it is happening in Vancouver), climate, Chinese soot leading to increased rain on North America’s west coast, etc, etc–all of these comments reveal a brain that thinks for itself and does not participate in group think mentality. I am an NDPer but I can criticize the NDP and Vision Vancouver better than most Conservatives can.
Actually that reminds me of something I wanted to point out. I believe this RE bear blog brings together people across the political spectrum. We have NDPers and Conservatives here as revealed by the contents of posts and the ratings of posts. We may be at different ends of the political spectrum but the one thing we can all agree on is the absolute insanity of Vancouver’s real estate bubble. This political partisan diversity on this blog demonstrates that the contributors to this blog are not group thinkers.
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July 31st, 2012 at 7:17 pm 71
@chilled:
Time for you to drink your milk and have a nap.
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July 31st, 2012 at 7:26 pm 72
@ScubaSteve:
“Time for you to drink your milk and have a nap.”
A completely irrelevant comment from a minion hoping to be thumbed up by his fellow minions.
Anyway, thanks for validating my point.
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July 31st, 2012 at 7:29 pm 73
@joe_blown_away_by_high_housing_costs:
“This political partisan diversity on this blog demonstrates that the contributors to this blog are not group thinkers.”
If you have to claim you are not into group think, you *are* group think. Christ, you sound like a Scientologist.
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July 31st, 2012 at 7:45 pm 74
@chilled
No, I am arguing I am not a group thinker because you accused the contributors of this blog of being group thinkers. I am a contrarian among my own political fold.
You really should spend more time reading this blog. You will see a great deal of debate. Contributors here do not all espouse the same opinions. That’s why I think this is one of, heck scratch that, THE best forum to discus Vancouver urbanism bar none. I have learned a great deal from this blog and vreaa and that’s precisely because the contributors do not all think like me or like each other.
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July 31st, 2012 at 7:50 pm 75
@Joe_blown_away_by_high_housing_costs:
READ my first post today, oh sorry, you can’t, it’s already has been thumbed down to oblivion.
Once again, thank you VCI for validating my point.
I can only hope a few of you will remember what it was.
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July 31st, 2012 at 8:10 pm 76
Anyway, the VCI minions once again eat their own and profess not to subscribe to ‘group think.’ Too funny, too stupid.
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July 31st, 2012 at 8:13 pm 77
@VMD:
If Flaherty didn’t introduce the CMHC rules this month, we could’ve been looking at -25% to -30% YoY in sales (as compared to the current -16%), and MOI >9.5 (vs the current 8.5).
August will be much more exciting!
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July 31st, 2012 at 8:15 pm 78
Uh, Oh… Chinese home price increases could give give a jolt to Vancouver real estate… (Despite my bearish inclinations)…
http://www.bloomberg.com/news/2012-08-01/china-home-prices-rise-in-market-turning-point-soufun-says.html
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July 31st, 2012 at 8:24 pm 79
I went for a bike ride in the westside just now.
Up and down at least 40 blocks.
Many, many blocks had two to three for sale signs.
I must have counted a sixty or so in total.
And get this muppets….NOT A SINGLE SOLD SIGN….NOT ONE….NADA…ZIP…ZERO…ZILCH
Holy truck, it’s begun.
Still, we have a way to go before we hear widespread screams in the night.
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July 31st, 2012 at 8:27 pm 80
@Bo Xilai:
or as Business Insider sees it, Chinese Real Estate May Be Doing The Dead Cat Bounce ; )
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July 31st, 2012 at 8:29 pm 81
You guys get too emotional, check this out to feel better:
http://www.vancouversun.com/sports/Photos+talented+beautiful+women+London+2012+Olympics/6814079/story.html
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July 31st, 2012 at 10:03 pm 82
@Turkey:
Now THAT is cynical. $1.5 million for 2300 s.f. on a 25 foot lot in Stratcona?!? Unbelievable.
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July 31st, 2012 at 10:13 pm 83
Inventory has basically peaked for the year.
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July 31st, 2012 at 10:19 pm 84
@Vote Down The Facts:
It’s too soon to tell. Actually it’s remarkable that the inventory has pretty much stayed around 19k this summer.
I have a feeling the peak is October 2012.
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July 31st, 2012 at 11:30 pm 85
@Vote Down The Facts: It looks that inventory peaking is likely, but by no means certain.
One of the models I would consider is if sales are not high enough relative to inventory in the spring, weakness will be amplified in the second half of the year: the thinking here is that in most years there is enough “sales inertia” to allow the weakest sellers to safely exit, but if volumes aren’t high enough to clear these types… we should not discount that conditions could continue to slide.
Not to say this model is the right one — it’s only my conjecture — and it could be 2012 is on target to be weaker than 2010 but stronger than 2012. This scenario would be based on macro factors: lackluster population growth, continued malaise in wold economies including a slowdown in Asian investment spending, and some renewed credit tightening offsetting lower interest rates will cause relative weakness but not as acute as what the GFC produced starting about this time in 2008.
Those are my thoughts. I’m still looking for something between 2008 and 2010 as most likely but I think there is tangible risk of that guess being too optimistic and, frankly, I would be pleasantly surprised if my guess were too optimistic.
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July 31st, 2012 at 11:31 pm 86
@jesse: Oops *stronger than 2008
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