Falling, not crashing.

Here’s a nice article that should reassure you.

The housing market in Canada is forecast to fall, but not crash like in the US.

In fact the first three paragraphs each repeat that this will NOT be like a US style crash.

Canadian housing prices will fall 10% over the next several years and homebuilding will slow sharply in 2013, but the country’s recent property boom is not expected to end in a U.S.-style collapse, according to a Reuters poll.

The survey of 20 forecasters published on Friday showed the majority believe the Canadian government has done enough to rein in runaway prices, preventing the type of crash that has devastated the U.S. market for years.

“This isn’t a sharp correction, this isn’t a U.S.-style correction, it’s just simply an unwinding of the excess valuation that was created by artificially low interest rates for a long period of time,” said Craig Alexander, chief economist at Toronto-Dominion Bank.

“I would emphasize that while a 10 % correction sounds scary, in actual fact, this would be a healthy outcome.”

Just a gentle feather slowly drifting to the safety of the ground.

Read the full article here.

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G
Guest
G

Just a comparison to the news article about USA housing market in June 2007 (when the market slowed and before the crash):

http://www.msnbc.msn.com/id/19069785/#.UKNpb-Oe85Q

– NAR (National Association of Realtors) predicted slight decline in price in 2007 and for 2008 “expects the market to rebound, and existing home prices are forecast to rise 1.7 percent.”
– “Lawrence Yun, the NAR’s senior economist, said that sales have been stronger in lower-price markets, dragging down median prices, an effect he described as a “temporary distortion.””
– Ben Bernanke “the problems don’t seem to spreading to the broader economy.”
– Feb 2007, lenders started tighten standards for borrowers.. (sub prime)

And we all know what happened in 2008….

patriotz
Member

” June 2007 (when the market slowed and before the crash):”

Prices in the US had already been falling for a year at that time.

Home sales to rise marginally in 2013, prices to be flat: forecast

Despite the large drop in home sales that much of Canada experienced in recent months, 454,000 homes will change hands this year, just 1 per cent less than in 2011, real estate agency Re/Max forecasts.

It expects the value of houses nationally this year to be flat compared to last year.

Keep in mind that predictions from this source require the same reality adjustment as those from North Korea.

Piklishi
Guest
Piklishi

It is funny what I heard yesterday in the news at the morning edition CBC. Someone said ” market has already started to recover” and ” in the next year will be flat”. I just don’t know how can you lie in public like this, while knowing that your falae statement will be published on the Internet. Apparently bernake is doing it for so long and he still has his job. I guess it doesn’t matter???

Anonymous
Guest
Anonymous

“Canadian housing prices will fall 10% over the next several years”

I think what they mean is 10% PER year over the next several years.

patriotz
Member

@Piklishi:
“Someone said ” market has already started to recover” and ” in the next year will be flat”. I just don’t know how can you lie in public like this”

Neither is a lie. I think the market is starting to recover myself – because to me it means lower prices. The term is subjective. And claims about the future are predictions. You can’t lie about something that hasn’t happened yet.

vangrl
Member
vangrl

ummm Wow , anyone watching BNN right now?

vangrl
Member
vangrl

some guy named Sandhu from REmax was on, I’ll try and find the video to post when it’s available

bubbly
Member
bubbly

Canadian government has done enough to rein in runaway prices, preventing the type of crash that has devastated the U.S. market for years.

Huh? After prices went up by over 150% in a decade? That’s like preventing a tumor after it kills the patient.

Anonymous
Guest
Anonymous

Consumer debt loads grow at fastest pace in 2 years
http://www.cbc.ca/news/business/story/2012/11/14/transunion-debt-credit.html

Canadian debt loads grew at their fastest pace in two years during the summer, according to a report released Wednesday — an alarming rate given that officials continue to warn consumers that household spending is out of control.

Anonymous
Guest
Anonymous
real_professional
Member

Oh my god that BNN clip was horrible. There was nothing but conjecture!
And he moved his hands too much.

He said nothing of substance and tried to say, “don’t worry everything will be all right”

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

I see a lot of posts referencing the US housing crash. I assume you expect a crash in Canada too. Why else would you post such headlines.

Have any of you changed your methodology to determine if a crash is going to happen or not? Because you’ve been wrong for 6 1/2 years. That tells me there is a problem with your analysis.

Or do you stick to the assertion that prices have to crash “because they ALLWAYS do”.

Help this rich old bull understand.

Makaya
Member
Makaya

@Anonymous: That interview is going to haunt this guy in the coming months… You can see how uncomfortable he was when the journalists were pushing him just a bit. Just pathetic!

Anonymous
Guest
Anonymous

Sandhu dude on BNN talked about “pent-up demand” being unleashed in 2013 that will prop out the market. How can there be so much pent up demand when we are sitting at 70% of the Canadian population already owns their home–a record high number? Haven’t the last few years of low interest rates and easily available credit pulled forward future demand? What about softening demand as baby boomers look to downsize? What about increasing supply due to all the new condo/townhouse projects currently being built?

carpet muncher
Guest
carpet muncher

Gotta love these manipulating terms economists come up with, “unwinding of the excess valuation” “softening” “easing”…it’s all in the connotation because the economy is 98% psychology…

Ws
Guest
Ws
Ok, ok…maybe it wont be a U.S. style crash. Maybe it will be more Spanish? Irish? UK-ish? Portugal-ish? Maybe Aussie-ish? Perhaps it will just be a Canadian style crash…like a little snowflake all unique and special? To me, the uniqueness of the coming Canadian crash is how it unfolded all around Canada years before. No suprises here, no one caught with their pants down. Just unique Canadian arrogance – we are so much smarter than Americans so it just can’t happen here. Reminds me of the little (mostly young) Canadian travelers I run into around the world who have 5-10 Canadian flags, stickers, pins or whatever on their backbacks. Please, please don’t confuse me with an American it screams – I am so much smarter and worldy than an ignorant American! The irony always amuses me…always fun to pretend you… Read more »
Extend and Pretend
Guest
Extend and Pretend
@Anonymous: Sandhu RE Shoveling It / Transunion BNN should have that guy back on in a few months so that they can shoot him with his own shit. They should replay his pent up demand theory and ask where it is. The only pent up demand is the same as that from the tapped out gambler looking for a big score to rescue his kneecaps from the loanshark. Pathetic IS the perfect word. Does anybody here have a link to the text of that alarming Transunion report? Nothing here yet: http://newsroom-en.transunion.ca/ If Mark Carney had any balls he would announce a surprise quarter point increase in response to the Transunion report. Flaherty obviously can’t do anything about consumer debt but Carney could. BTW, I know what’s coming and I’m tired of reading it. The theory that the Canadian Dollar going… Read more »
gokou3
Guest
gokou3

@Anonymous: “Pent-up demand” by the boomers to sell their over-valued SFH, is what he referred to.

Devore
Member
Devore

@Anonymous: Look, stop using facts to confuse the issue. Soft landing, got that?

painted turtle
Guest
painted turtle

Sandhu: ‘First time buyers have built a lot of equity’?
Who are they? I thought the middle class was getting poorer and piling up credit card debts?

Who believes a Remax agent, anyway? People with mortgage anxiety, may be…

painted turtle
Guest
painted turtle
painted turtle
Guest
painted turtle

In case some people still need some arguments for the next coffee machine talk, here is a link to Ben’s excellent work:

ttp://theeconomicanalyst.com/content/comments-cibcs-no-us-style-crash-canadian-housing-report-part-3

‘This is the third and final post detailing my thoughts on the much-publicized “No US-style housing crash for Canada” report written by Ben Tal of CIBC.’

N
Guest
N

@Makaya:

Just another lying salesman. That’s his job. I don’t think he will regret it any more than a car salesman regrets getting someone in that luxury 4×4.

an observer
Guest
Interesting article in the Business section of the Vancouver Sun today. A big spread on the boomers who are all going to be selling / transitioning their small business in the coming years and how this huge supply of businesses will undoubtedly lower prices and how they should sell their business sooner rather than later to avoid having to close it down without being able to sell. It also spoke about how these businesses employ so many people and how this could be a hit on the economy but the good news is that when all these businesses are trying to be sold in the near future, younger people will be able to capitalize on all that supply enabling them to get great deals. Funny that they would never in a million years have the guts to swap out the… Read more »
slurker
Guest
slurker

@an observer:

The jobs impact argument doesn’t make any sense. Presumably the demand for whatever service or product the small business is providing won’t go away just because it closes up shop. Just because your favourite grocery store closes doesn’t mean you stop buying groceries does it?

This sounds like the same supply side nonsense that got us into this global economic calamity to begin with.

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