From southseacompany, confidence in the Canadian housing market has reached a record high:
“The experts are getting louder in their warnings that a housing bubble has formed in some parts of Canada, but Canadians don’t seem worried.”
“In fact, confidence in the housing market hit a record high in the latest weekly Bloomberg-Nanos index — even as respondents turned negative on their own personal finances.”
“The survey found 48.5 per cent of Canadians expect house prices to rise in the next six months, the highest level recorded in the survey since 2008. Fewer than 11 per cent expect to see house prices decrease.”
Read the full article over at Huffington Post.
It’s the end of another glorious work-week in the ‘couve and that means it’s time for another fabulous Friday free-for-all!
This is our standard run-on-the-mill end of the week news round up and open topic discussion thread for the weekend, here are a few links to kick off the chat:
–Richmond Air BnB RIP
–Vancouver sees first price increase in 8 months
–Should first-timers rethink buying in a hot market?
–Canada shadow banking half the size of banks
–Ontario starts tracking residency for RE purchases
–Define ‘foreign buyer denier’
–Site C losses up to $1 billion?
–Who would benefit from a crash?
–44% like idea of 30% tax on foreign buyers
So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments section below and have a superb weekend!
Bank of Canada Governor Stephen Poloz has said he doesn’t think there’s a strong correlation between interest rates and speculation, claiming even a 5% increase in rates wouldn’t have an impact on real estate speculation in Canada.
Over at BetterDwelling.com they disagree with this thought:
It was almost stupid to not buy property at these rates, since it was almost free money. This didn’t just give speculators more capital, it created speculators out of people that would normally not be able to play the game. These aren’t Bay Street suits with wads of cash. Everyone from your barber to grocery store clerks are turning into real estate speculators. Cheap rates, a larger qualified buyer pool, and the expectation that you can always make money, turned shelter into lottery tickets.
Read the full article here.
The Financial Post has an article that lays the blame for the enormous Canadian housing bubble on former Bank of Canada Governor Mark Carney:
Carney, perhaps even more than former Fed Chairman Ben Bernanke, was an excellent crisis central banker. Unfortunately, he did not nail the dismount.
After it became clear in 2010 that the developed world had exited the financial crisis, Carney raised rates just a little, to 1 per cent, and then left them there until 2013, when he joined the Bank of England.
Seems like joining the Bank of England should count as nailing the dismount.
If Canada has a hard landing, accompanied by a severe recession or a depression, Carney’s (and to a lesser extent, Poloz’s) mistake will have been unforgivable.
Read the full article over at the financial post.
Even outside of ridiculous vancouver, this nation is real estate crazy. In many key metrics Canada has surpassed the US housing bubble at its peak.
As David Rosenberg, the chief economist at Gluskin Sheff told BNN Thursday, “This bubble is on par with what we had in the States back in ’05, ’06, ’07. We have to actually take a look at the situation. The housing market here is in a classic price bubble. If you don’t acknowledge that, you have your head in the sand.”
Read the full article over at Macleans.