Monday, April 30, 2012
Will the weakness from the periphery move inwards. We have already seen from Larry's numbers that in Coquitlam higher inventory and lower sales are cracking prices.
It was the OK, then it was the Sunshine Coast, Whistler and Victoria...then the Fraser Valley and now we are into the GVREB area.
The best we (bears) could hope for is a small steady decline in prices and activity. What we DO NOT want is a sudden drop. We had that in 2008/2009 and the Captain Flaherty and Bosun Carney swung the ship right round to prevent any correction.
Well these two jolly fools are still at the helm, and any sign of signficant weakness and you can be suure the pressure from the RE lobby and their own fear of what may come will make them change course again. They will drag the CMHC out again and put an even more pro-RE board in, increase the cap, throw out tax-credits like life vests and try and keep the bloated ship afloat.
Better a small leak which they think is the result of their jaw-boning rather than the result of lack of affordability and the tendency of bubble to burst if left alone.
A small drop would make me a happy fish.
Friday, April 27, 2012
You remember Canada, the country with the world's second largest land mass.
Well Flaherty is trying to shift the CMHC monster to the OFSI and hope that any bust fall-out falls on them. Here's what Garth had to say: (I agree with him 100% BTW)
It might have been F’s finest hour to date. The man who brought us government-insured 0%-down mortgages. The guy who invented lifetime amortizations. The dude who, for three long years, refused to let the B-word depart his lips. The elfin protector of the real estate industrial complex. Amen, brother Flaherty. Have you finally repented? Does it matter anymore?
Thursday, April 26, 2012
In March we had .."a decline of 29.6 per cent compared to the 4,080 sales in March 2011 and an 8.4 per cent decline compared to the 3,137 home sales in March 2010." REBGV
We are on course to have 2900 sales for the REBGV for April.
That would be 10% less than last year and 20% less than April 2010.
That cannot be a pleasant situation for the 10,000 Realtors in the region (give or take a few hundred as these are 2010 numbers)
Now of course every sales has two parts a listing Realtor and a selling Realtor, so 2900 sales become 5800 transactions.
Rounding the numbers that comes to one transaction for every two Realtors in April. Even with our sky-high prices, that leaves a lot of agents with little or no income in April and on-going expenses.
Of course like many other fields, the top 10-20% are probably accounting for the lion's share of the transactions.
Saturday, April 21, 2012
Wednesday, April 18, 2012
Well Andrew Bell of BNN interviewed David Choi a well-known realtor who deals in the Mainland Chinese market.
What was interesting was the absolute lack of any remarks from the interviewer or interviewee about the ethics of allowing people, on occasion wealthy fugitives from China, to buy these properties with untaxed (maybe illegal) money and then leave them empty. Even while saying that China itself had restricted people to buying ONE home only.
It was like they had a right to do it, and 'Oh no' What would happen it they quit.
Andrew Bell did try and (gently) ask at the end about locals who maybe getting resentful about the huge prices being paid for homes which are then left empty and what did his guest think about that. It didn't even seem to register with him! He went on about how the Chinese investors were running out of good properties to buy and may have to buy homes to renovate.
Clearly no one is in the least concerned about home prices shooting out of the reach of those working and living here and EVEN WORSE that homes are being left empty in an area of tight housing and high homelessness. Not the Federal Government, and definitely not our good-as-useless Premier who has no real platform of ideas as far as I can see.
This is the free-market taken to the level of lunacy. Even Singapore has property restrictions. Why not just sell of the whole city to these 'investors' and the rest of us can be bused in from Abbotsford to clean the streets, protect their property, treat their illnesses if they visit and mow the lawn.
Yes, offshore buyers are just a part of the problem, however this is a curse no city wants, especially one that needs tax-paying, consuming people to stay vibrant (forget the arts which have died in this town) and which has pressure to house those who have chosen to make their lives here (from all back-grounds).
Start with below-inflation-interest rates, mix in the CMHC insurance, lengthen mortgages, have banks with no skin-in-the-game and finally top off with endless off-shore tax-unpaid, hot dough and voila....you have an almighty bubble.
Tuesday, April 17, 2012
These three graphs will show you how different things are in reality and how potentially dire:
UPDATE 1-Canada home prices fall in March, sales up-CREA
Mon Apr 16, 2012 11:18am EDT
* Home prices fall 0.5 pct in March from year earlier * Vancouver-area price declines impact national avg * Prices in Toronto rise 10.5 pct * Home sales up 2.5 pct in March from Feb By Jon Cook TORONTO, April 16 (Reuters) - Canadian home prices fell in March from year-ago levels even as existing home sales activity picked up, with a cooling of the once-hot Vancouver market offsetting big price gains in Toronto and steady increases elsewhere.
A report on Monday from the Canadian Real Estate Association showed the average residential home price in March was C$369,677 ($370,600), down 0.5 percent from the same period last year. The figures are not seasonally adjusted. But the broad number masked big differences between cities and regions.
The average selling price in Vancouver, Canada's most expensive major market, fell 3.1 percent from a year earlier to C$761,742. Prices in the nearby Fraser Valley area tumbled nearly 10 percent.
But prices in Toronto, which has seen a boom in condominium construction, jumped 10.5 percent in March from a year earlier. "The slight decline in the national average price points to a tug of war between Toronto and Vancouver," Gregory Klump, the industry group's chief economist, said in a statement. Klump added that national prices in 2011 had been pushed higher by "record level high-end home sales in some of Vancouver's priciest neighborhoods."
The report also showed existing home sales climbed 2.5 percent in March from February on a seasonally adjusted basis. But the increase, unadjusted, was up just 1.6 percent from year-earlier levels. This represented the lowest yearly growth rate since April 2011.
"While it is difficult to see in the monthly data, there is a sense that the housing market is gradually slowing," David Tulk, chief Canada macro strategist at TD Securities wrote in a research note.
"The dynamics of this report show a maturation of the housing market cycle in Vancouver which is likely to be repeated in Toronto over the coming year. Outside of these two markets, the rest of the national market is still holding in reasonably well."
Tulk added that gradually rising Canadian interest rates over the next two years should help slow the market further. The news should provide some relief to the Bank of Canada, which has warned that rising household debt levels, in many cases the result of large mortgages, are the biggest domestic threat to the economy.
Canada's housing sector never experienced the subprime mortgage boom and bust that drove the United States into recession. And a post-crisis housing market rally, triggered by record low borrowing costs, played a key role in driving the recovery.
But Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty have both expressed concern about the housing boom, with Flaherty tightening mortgage rules several times to try to cool the market.
Sunday, April 15, 2012
No, CMHC offers mortgage loan insurance products on various property types including duplexes, condominiums, owner-occupied properties, manufactured or mobile homes, properties requiring renovations and much more, including rental and nursing homes. Please check with your lender for more details.
I would have no problem for those building NEW rental stock to get insurance, but not for those just buying what's already built. It would be dumb beyond words.
The article says that a housing bust could hurt us a lot via the CMHC. Duh....We have been saying that in the bear blogs for several years now, ever since this Government doubled their capacity.
Saturday, April 14, 2012
Please work out the MOI yourselves
1) Maple Ridge
2) Pitt Meadows
3) Sunshine Coast
5) Vancouver West
6) West Vancouver
15) North Van
Van West Attached:
Wednesday, April 11, 2012
Here. Lets call it the baby bear case. He says we will see weakness but not a collapse in RE and pokes fun at the 'forever-in-crisis reporting' of Macleans. It is a valid view-point which we need to consider.
HARBINGERS OF DOOM
Andrew Coyne Apr 10, 2012 – 6:00 AM ET | Last Updated: Apr 10, 2012 11:55 AM ET
Even by Maclean’s standards, the cover was alarming. “You’re about to get burned,” screamed the headline, over a picture of a house that was literally on fire. “Canada looks like the us before its devastating housing crash — maybe even worse.” And the kicker, for those still hesitating: “Why it’s officially time to panic.”
This last was doubtless something of a little in-joke. For my old colleagues at Canada’s newsweekly, it is always time to panic, especially about house prices. The magazine’s editors inhabit a world beset by all manner of hitherto undetected demons, from more expensive groceries (“sudden shortages, riots over prices, the world food crisis is about to hit home”) to insomnia (“the truth about a modern epidemic”) to, well, “The Return of Hitler.”
But nothing, nothing frightens the magazine or, it is hoped, its readers, more than real estate. For years Maclean’s has been shuddering in terror of the imminent collapse of the Canadian housing market. From the relative calm of its late 2007 cover story (“Buy? Sell? Panic?”), the magazine soon picked up signals of the coming apocalypse. “House prices start to fall,” the magazine announced the following summer. By autumn, with the world financial crisis in full swing, so was Maclean’s. “Canada’s Looming Real Estate Crisis,” the cover shouted: “Why house prices may soon fall through the floor.”
As the months wore on, and the cataclysm failed to arrive, Maclean’s remained ever hopeful of a real collapse. But durned if prices, after a brief dip, resumed rising. By June 2008, a grumpy Maclean’s was warning readers “Don’t believe the housing hype,” insisting there are “plenty of signs that the Canadian housing market is still on some very shaky ground,” even if “average home prices are up more than 16 per cent this year.”
Fast forward through several more stories in the same vein and by this year the magazine and others were in even less doubt: Canada was in a housing bubble. Why, just look at the numbers. For starters, there’s the oft-repeated fact that Canadians are carrying debts worth 153% of their annual income. That’s true: but other countries’ citizens manage much heavier debt loads, from the spendthrift Swiss (200%) to the feckless Dutch (260%) to the profligate Danes (320%). We may be carrying almost as much debt as the Americans before the crash, but with nothing like the same risk factors, from subprime mortgages to small regional banks, that made their economy such a firetrap. And if we’re mentioning how Canadians’ debts have grown, we should surely also mention that their assets have as well: still five times as large as their debts.
Mortgage costs, interests and principal combined, are currently running at about 30% of disposable income — again, higher than a few years ago, but barely half what they were in the early 1990s. Yes, house prices were still rising as of year-end, but more slowly than before, as even the Maclean’s piece acknowledges — though somehow it cites this as evidence for its doomsday thesis. But then, what doesn’t? If prices were rising quickly, that would be proof of housing “mania.” If they fell a little, that would be the bubble starting to burst. And if they fell a lot? Look out below!
The truth is the real estate market is cooling slightly, helped by a modest tightening of lending regulations. It’s true that a rise in interest rates from current, historically low levels would put some homeowners in distress, but they’d have to spike a long way before the damage grew widespread — a concern, sure, but nowhere near as frightening as, say, the return of Hitler.