IMF issues fresh warning on Canada housing market

Apparently it’s not just the Bank of Canada that thinks Canadian RE buyers are suckers. The IMF is issuing yet another warning of potential problems in the Canadian Real Estate Market.

The International Monetary Fund is raising red flags about Canada’s housing market, warning that moves by Ottawa in recent years to tighten mortgage lending standards and boost oversight of the country’s financial system haven’t gone far enough.

Household debt levels remain well above those in other Western countries, the organization said in a commentary posted to its website Monday. Home prices have jumped 60 per cent in the past 15 years and remain overvalued from 7 per cent to 20 per cent, in line for a “soft landing” over the next few years, the IMF said.

At the same time, it reiterated its call for Canada to collect more data on its housing market and to centralize oversight of the financial sector. As it stands, regulation remains fractured among the Department of Finance, the Office of the Superintendent of Financial Institutions, the Canada Mortgage and Housing Corporation and provincial governments all playing separate roles in regulating the housing the market.

Read the full article in the Globe and Mail.

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Bernanke, Ben
Bernanke, Ben
5 years ago

forget about the interest rates, look for unemployment

Maui Misor
Maui Misor
5 years ago

We haven’t heard much from Tsurd Sewerville lately. Wonder if he’s renovating.

Maui Misor
Maui Misor
5 years ago

You really need to quit reading the Sun. I cancelled my subscription many years ago when it be came obvious it was little more than a RE rag with paid submitted content disguised as news.

Cancel your subscription and save some trees.

space889
space889
5 years ago

@Ford Prefect – This is exactly why financial education and basic behavioral psychology are not taught in K-12 educations. So even intelligent people are kept stupid and easy to dupe by politicians.

space889
space889
5 years ago

@Oracle – Single people making $76K/yr aren’t buying million dollar houses but a couple making $150K/yr combine sure are buying those million dollar shacks.

I seriously doubt those rich HAM are buying the million dollar shacks/duplex/TH on Vancouver East/Burnaby/etc

Ford Prefect
Ford Prefect
5 years ago

patriotz 104: unfortunately the public also need fixing. Today on CBC there was an article on the possibility of Yellen raising interest rates in the US.

The second most popular comment was, in part, “Unfettered, unregulated pure market housing has resulted in sky high prices…” . A response pointing out that this view is ridiculous in face of the facts that CMHC 100% guaranteeing billions in mortgage loans, low interest rates etc. were the cause of high housing prices was voted into oblivion.

It seems to me that when the housing market inevitably implodes most folks will have no idea what happened either at the time or subsequently. It will be as if they suffered a concussion and have no recollection of events preceding that point.

patriotz
5 years ago

@71: ““Why Finance Minister Joe Oliver isn’t intervening in Canada’s housing market”, Financial Post

Another headline needs fixing. That should be:

“Why Finance Minister Joe Oliver will continue intervening in Canada’s housing market”

And I don’t even get paid by the NP. 🙂

Oracle
Oracle
5 years ago

@UBC in crisis mode:

Why the fuck are we still debating HAM?

Its real.

People like GT work and lease out space from the Big 5 banks. Note how he is pumping bank dividends all the time. D

Foreign money is real. 76K annual incomes are not buying million dollar homes. And no one buys with a million dollar mortgage.

Oracle
Oracle
5 years ago

Lower dollar means less disposable income for homeowners.

Means cash crunch for smug homeowners.

Hahaha. The BoC along with Harper really fucked up things. Now they are caught. Purposely undermining the standard of living of tens of millions of Canadians.

Don’t split the vote

Shut It Down Already
Shut It Down Already
5 years ago

92, it doesn’t matter how many times you repeat it. You’re still wrong. Unless you’re now trying to claim that an even smaller subset of all sales (foreigners buying places which are new) is driving the entire market?

VMD
5 years ago

Mr. Trump always has a flair for the dramatic.

Mar 10, 2015
Large glass panes fall from Trump tower construction site in Vancouver

Mar 24 & Nov 14, 2012 (Toronto)
Falling glass danger closes downtown streets
“No glass came down, but this is the third time there have been concerns about glass falling from the Trump tower. Glass fell twice from the skyscraper in 2012. ”
“We need to ask some sharp questions to builders about how they’re constructing these buildings,” he said. “If this is happening now with buildings that have just recently gone up we can imagine what will happen five or 10 years from now.”

VMD
5 years ago

@94 Nice find! I especially enjoy Ian’s concluding remarks:
“Somerville, of course, remains entitled to his opinions and he’s entitled to share them, whatever they may be. But anyone considering their value would do well to recognise the Centre Urban Economics for what it is: The academic wing of Vancouver’s real estate industry. And Dr Somerville isn’t merely an observer of that industry. He’s a part of it.”

space889
space889
5 years ago

@Guy Smiley – I was never on the island, why would I want to be on an island inhabited by racists, trolls, pretenders and morons?

You team BPOM can keep the filthy island to yourself, thank you very much.

btw, it’s funny that the bear team is lead by a frustrated realturd who can’t get it despite the boom and have resorted to blaming immigrants for his own failure.

Remember, RE industry is a people industry. With your kind of attitude BPOM, your stink would chase away most reasonable prospects from miles away.

Madashell
Madashell
5 years ago

@94 Many Franks

“While Somerville is enthusiastically cited – more than 100 times in the Vancouver Sun alone in the past five years – little if any mention is made of an important fact: His Centre for Urban Economics is sponsored by the real estate industry. And his job is to prepare people to join that industry.”

Joe Mainlander
Joe Mainlander
5 years ago

Re; #93 True, Shiller does argue that historically there hasn’t always been a direct correlation between low interest rates and high asset prices, but he does discuss the influence of low interest rates on public perception of the economy. http://www.nber.org/papers/w13558.pdf “We have seen here that the big movements in stock prices and real estate prices in the last decade or so do not line up with movements in long-term interest rates over the same time period.” “Yet if we are doing very broad comparisons of the present time with another time, comparing the early 1980s when interest rates were very high with today, we might say that lower nominal interest rates are indeed a factor in the relatively higher asset prices we see today.” “The money-illusion theory that low nominal interest rates help propel real long- term asset prices upwards… Read more »

UBC in crisis mode
UBC in crisis mode
5 years ago

Van West Jan. 2015 average sale price $2.45 million. It is safe to say THIS IS ALL HAM purchase in Van West.

http://www.zoocasa.com/blog/month-end-january-2015-homes-sold-in-vancouver/

Many Franks
5 years ago

Here’s Ian Young taking the boots to Tsur Somerville:
http://www.scmp.com/comment/blogs/article/1735460/vocal-academic-isnt-just-observer-vancouvers-real-estate-industry-hes

This ought to be fun to watch. I’m backing neither horse.

I'm just sayin Joe M
I'm just sayin Joe M
5 years ago

Shiller agrees, “There is not a tight fit at all between the two: high mortgage rates do not translate automatically into low home prices,” he says.

Son of Ponzi
Son of Ponzi
5 years ago

#89

I think older buildings are not doing nearly as well as new apartments.
—————–
Guess why? HAM does not like old.
How often do I have to repeat this.

@LL
@LL
5 years ago

garth is playing his readers. They’re the ones that can’t think for themselves and need a ‘leader’.

We all know why Vancouver is much more expensive than Victoria.

Guy Smiley
Guy Smiley
5 years ago

I think you’ve been voted off the island.

vangrl
vangrl
5 years ago

I shouldn’t say I believe, as I bought a condo in 2003 and sold in 2010 for a bit more than double, and I seriously don’t believe that if I was to have sold it today that i”d get any more than in 2010. I think older buildings are not doing nearly as well as new apartments. Honestly, if I ever bought an apartment again I’d probably buy older, even with the depreciation reports. I just think they were better built. My apartment building never had any of that rain damage debacle and it’s almost 50 years old. I’d almost be tempted to get into one of those really simple co-ops, that have no underground parkads that leak, and no elevator maintenance crap. Just a really simple and cheap accommodation in the city that I could spend 6 months of… Read more »

vangrl
vangrl
5 years ago

I believe that apartments appreciated more in the period of 2005-2010 than 2010-2015, even though rates were lower during the later period?

Possibly because of the max amortization period being shortened?

LL
LL
5 years ago

How can this fucking idiot look at Canada’s housing market and say there is no bubble? At this point it just makes him look REALLY stupid. Almost as stupid as GT saying HAM has little affect. Sure… Canadian families earning $74K are buying $51M properties. It’s embarrassing how ridiculously and intentionally naïve these a-holes are.

“Canada’s Oliver say there is no housing bubble”, Reuters, Tues Mar 10, 2015

http://ca.reuters.com/article/businessNews/idCAKBN0M623120150310

Joe Mainlander
Joe Mainlander
5 years ago

Re: #83 Home prices never ‘soared’, in the 60’s and 70’s. corrected for inflation prices remained around the three time income level. Rates in the early 80’s rose to over 20%. Many lost their homes because they couldn’t make payments. There was also a deep recession following the Prices then plunged. This was referred to the ‘Volker Recession’, after the US Fed chairman, as his tight money policy of using high interest rates to kill inflation was a significant factor in this recession. Rates and CMHC standards fell during the 00’s; 1999: CHMC lowers DP standards from 10% to 5%. 2000-2001:Nasdaq plunge, recession, 911 attacks =BoC drops rates from 6% to 2%. 2003: CMHC reduces mortgage insurance premiums by 15% & eliminates homeowner price ceilings 2007: CMHC allows longer amortization periods (from 25 yrs to 40 yrs). 0% down payment.… Read more »