Category Archives: debt

Bank of Canada warns of housing market vulnerability

The bank that cried wolf: Housing market vulnerabilities are still high.

Vulnerabilities in the Canadian housing market are still high despite rising interest rates and tighter mortgage rules, Bank of Canada Senior Deputy Governor Carolyn Wilkins said on Thursday.

It also released results of a model it said showed Canadian banks’ capital positions would not be affected by a 20 percent correction in the housing market, with the biggest declines in Toronto and Vancouver.

Read the full article here.

Runaway market taking ‘a breather’

As you may be aware it is always a good time to buy or sell real estate according to most real estate professionals who earn their living by buying and selling real estate.

Well right now it’s a great time to buy or sell real estate because the runaway market is taking a breather.

It’s a “soft landing,” according to Royal LePage CEO Phil Soper, who says their latest house price survey shows the effects of government measures to cool things down.

What were previously called the “dangerously overheated” conditions in Metro Vancouver housing have cooled significantly, but prices have remained resilient.

He says it’s the soft landing policy-makers had hoped for, rather than a crash.

“But it won’t stay this way for long. Household formation in Canada… is going to grow rapidly,” he predicts.

Read the full article here.

Hey Vancouver! Why so miserable?

You’d think that living in a great city would make you happy, but apparently that’s not true for everyone.  Southseacompany points out this article about why people in Vancouver and Toronto are so unhappy.

Vancouver is now a place you try to survive as much as enjoy. All the problems are well known, the greatest being the high cost of housing. When you, as a young person, have little hope of making a comfortable life in a city that you love, of course it’s going to cause unhappiness. There is a sense that Vancouver is being yanked away from those who love it most, taken over by mercantilists and arrivistes from around the world who care little about a city’s “soul” so long as the skiing’s good and there’s a place that sells beluga caviar. And then there are those sitting on a lottery ticket with the house they bought years ago, waiting to cash out, and those sitting on a mountain of debt, praying interest rates don’t go up. It doesn’t sound like the kind of environment that would engender a cool community vibe, a place where relationships between people can flourish. And that, I think, is what the survey on happiness has tapped into.

Read the full article here.

BC slides

Kabloona pointed out this article: “dramatic drop in home sales makes B.C. an outlier among provinces”

“VANCOUVER—B.C.’s real-estate market has gone from being one of the strongest in the country to the weakest as the number of sales drops sharply in comparison to other provinces.

The B.C. Real Estate Association (BCREA) is forecasting a 21 per cent drop in sales in 2018. Meanwhile, the number of sales in July was 24 per cent lower than the previous July, according to Douglas Porter, chief economist and managing director of BMO Financial Group….

“…..Compared to the rest of the country we are noticing that it’s especially weak, which is quite a turnaround from what we’ve seen over much of the past 10 to 15 years,” Porter said. “It’s quite unusual for Vancouver to stick out.”

Read the full article here.

Luxury condo tower pulled on weak demand

It appears there might be a limit to ‘build it and they will come’. Southseacompany points out a recent development proposal that was pulled amid signs of weak demand.

“A proposal for a downtown Vancouver luxury condo tower that was scheduled to go to a public hearing next week has been abruptly cancelled by the owner.”

“A representative of the developer, Brilliant Circle Group, sent a letter to the planning department last week withdrawing the project. The letter, obtained by The Globe and Mail, explained that the decision “is due to the impact of the rapidly changing real estate market, which affects both the unit mix and the CAC evaluation.””

““Everything’s corrected and the luxury market is gone,” said Ian Watt, a realtor who specializes in higher-end housing. “Anything under $2-million will sell, but in the last two months, there’s been only one sale over $3.5-million.””

Read the full article here.