It seems like one of these bank economist forecasts come out every week, but TD is calling for a 15% decline in house prices here and in Toronto over the next couple of years.
“There have been growing signs that the markets have been tilting towards excess supply of new multiples,” the bank said.
Indeed, condo prices in both cities have shown signs of slowing down much more than the price of single-family homes, the usual benchmark of a market’s overall health.
“In fact, looking at the trend in condo prices, you can see there has been essentially no increase in prices since the federal government first began tightening mortgage rules in mid-2008,” the economists said.
So if the average selling price on a Vancouver single family home is already down 12% year over year and the outlook for condos looks worse… maybe not the best time to buy a presale condo eh?
A couple of very interesting articles:
Pimco and JP Morgan halt vacations to prepare for crash?
When one company decides to cancel vacations, or impose additional workloads on their employees due to projected events, it is not considered relative news. However, when several institutions, analysts, and even the head of the World Bank acknowledge a coming crisis, then everyone needs to come to the realization that something big is on the horizon that will have an effect on both Wall Street and Main Street.
21 signs this could be a long hot crazy summer for the global economy
The summer of 2012 is shaping up to be very similar to the summer of 2008. Things look incredibly bleak for the global economy right now. Economic activity and lending are slowing down all over the planet, and fear is starting to paralyze the entire global financial system. Things did not look this bad back in the summer of 2011 and things certainly did not look this bad back in the summer of 2010.
Over at the CBC there’s an article about the ‘uncertain fate’ of Vancouver real estate.
Vancouver’s real estate market has taken another interesting turn, with listings up and sales down during what is usually a busy time of year.
In May, average prices for houses have dropped about $150,000 compared to one year ago. That 12-per-cent drop wiped out two years of price increases.
The reason appears to be that too many more sellers are trying to cash in at the same time. Listings are up by 23 per cent, but fewer are buying: sales are down 24 per cent.
“Probably, on average, about a 150 or 160 homes in Vancouver are reducing their price every day in the hope of catching, getting ahead of the train and maybe get out before they can’t,” said realtor Larry Yatkowsy.
Larry is an interesting fellow, he seems to change opinions frequently, but isn’t it in most realtors interest to get sellers to lower listing prices to make a sale?
Canadian Mortgage Trends is saying that changes to HELOC loan to value (LTV) limits are a done deal.
If so this means the maximum HELOC you’ll be able will move from 80% to 65% of the total value of the property.
Read the original link for full details. Many commenters there seem to think this is too big a move.
65% is too much of a leap all at once.
I can’t understand why OSFI doesn’t ratchet the LTV ratio down a little more slowly (i.e., 5% at at a time and sit back to observe the consequences).
As has been noted lately, the previous three sets of mortgage tightening guidelines have been gradually working their way through the credit markets effectively.
You can kill an ant with a hand grenade, but it usually makes a hell of a mess.
Even with all the recent warnings of a housing bubble that is no longer limited to just Vancouver and Toronto, you’ll still find lots of media coverage that dismisses bubble talk or explains it away as an ‘ownership premium’.
It’s not difficult to see why this is – there are thousands of people who’s incomes depend upon the housing market.
Whether its condo marketer Bob Rennie or a random realtor, they all have their day to day income tied to the health of the real estate
market and conveniently are given ‘expert’ status and quoted by the local media.
That makes an article opener like this all the more shocking to newspaper readers:
Is there a housing bubble in the Lower Mainland? Housing zeppelin is more like it. Bubbles, after all, are soft and cute and harmless. Zeppelins, conversely, hurtle into the ground, spewing flaming wreckage in all directions. And that’s precisely what we’re about to witness in Metro Vancouver.
That’s the intro to a rather dramatic editorial written by Gord Goble and published in a number of local papers.