Canada's Housing Bubble

Analysis of the real estate bubble in Canada -- http://CanadaBubble.com

Home-owning baby boomers should consider ‘for-sale’ signs Print E-mail

October 17, 2011 ROB CARRICK theglobeandmail.com

Baby boomers, the housing market is in your hands.

Out of a population of 34.6 million, Canada has roughly 10 million people who were born between 1946 and 1965. This massive boomer cohort started turning 65 this year. All those empty nesters will soon have a decision to make. Should they sell now to downsize their family home, or stay on to welcome grandchildren?

This could be one of the most important questions that baby boomers deal with as they enter retirement, and the financial impact will be widely felt. Expect a slowing in today’s hyperactive housing market, but not right away.

 
Selling price of new homes drops in metro vancouver Print E-mail

October 17, 2011 Brian Morton Vancouver Sun

Confusion over HST may have reduced demand in some markets: developers

The selling price of new homes dropped by 0.4 per cent in Metro Vancouver in August, compared to July, and confusion over the HST may be a contributing factor - especially for pre-sales.

The monthly new housing price index released by Statistics Canada on Wednesday concluded that Vancouver experienced the most significant monthly price decline, month over month, as builders recorded lower negotiated selling prices and relied more on promotional pricing to generate sales.

 
Occupy Vancouver 2011 march Print E-mail

Dim lights

 
An American asks: Is Canada’s real estate market in a bubble? Print E-mail

Oct 14,  2011 Preet Banerjee theglobeandmail.com

I’m in New York this week and I’ve noticed a few things. I think their hamburgers are overpriced and they think our Canadian real estate is overpriced.

One of the best burgers you can buy in New York City is a relatively well kept secret. There are no signs beckoning you to the location. On the contrary, it seems the owners have almost gone out of the way to keep it hidden from view. Simply called “The Burger Joint”, you have to hunt for it as it's nestled deep inside the main floor of a posh hotel on the Upper West Side. Behind a curtain. (For those who are curious, I’ve uploaded a video on YouTube.)

 
A sky-high view of global real estate markets: Is Canada really different? Print E-mail

Oct 13, 2011 Ben Rabidoux theeconomicanalyst.com

Yesterday I discussed the fact that we all have what psychologists often refer to as 'recency bias'.  It's what makes us believe that our recent past represents a stable and predictable norm.  It's what allows us to believe, for example, that house prices in Canada can continue to outpace incomes, GDP, rents, and inflation by 2-3 times into the indefinite future.  Common sense may tell us otherwise, but it's amazing how easily we can be lulled into thinking that this is 'normal' price appreciation.  It's not.  And yesterday, we saw just how unusual our current real estate upturn has been in the context of our own history and in relation to booms in other nations.

 
Retirement-bound Canadians piling on debt Print E-mail

Older Canadians are nearing or entering retirement more indebted than ever before, piling on debt at a much faster pace than their younger counterparts, according to a report from TD Economics.

Much has been written about the fact that household debt in Canada has soared to a record high in the last decade, with all age groups showing a significant pick-up in the pace of borrowing in recent years. The TD report noted that younger Canadians, many of whom are entering the housing market for the first time, continue to record the largest debt burdens.

 
Buyer's Market in Vancouver Print E-mail

Dim lights

 
Canada's Economy Shows Signs Of Slowdown Ahead As 28 Of 49 Industries Shrink Print E-mail

Oct 11, 2011 huffingtonpost.ca

More than half of Canada's major industries are showing signs they are shrinking, suggesting a broad economic slowdown, the Conference Board of Canada reported Tuesday.

The Conference Board's Leading Indicator of Industry Profitability Index showed 28 of 49 industries declining in September, meaning "the near-term outlook for Canadian corporate profitability is negative," the board stated.

 
Beware 'the housing wealth effect' Print E-mail

Let’s hope the housing market holds up better than the stock market has.

If not, we really have problems.

Feeling bummed out about how your registered retirement savings plan or investment account is shrinking in value as stocks plunge? Just wait and see what happens if the housing market slumps.

 
BC In-migration Turns Negative Print E-mail

Dim lights

 
Canada doesn't see housing bubble, no need to cool Print E-mail

Oct 05, 2011 John McCrank ca.reuters.com

NEW YORK (Reuters) - The Vancouver housing market is attracting unusually strong demand but Canada as a whole does not face a housing bubble that requires government action, Finance Minister Jim Flaherty said on Wednesday.

Flaherty and Bank of Canada Governor Mark Carney have paid close attention to Vancouver housing prices, and they have warned Canadians not to take on so much debt that they will not be able to service it when interest rates rise.

 
Mike Brock: The hidden Canadian housing bubble Print E-mail

Oct 04, 2011 Mike Brock nationalpost.com

Let me be provocative and say that our real estate bubble has the same fundamental problem as the one in the U.S., which exploded gloriously, kicking off the financial crisis.

The bubble in real estate has been extremely slow growing, but bubbles do have a way of going parabolic right before their collapse. Is real estate in Canada parabolic? It doesn’t appear so on a year-over-year basis. But it certainly does look that way when one looks at the 50-year trend, which is consistent with the rest of what I’m about to say.

 
Wall Street occupation inspires Canadian protesters Print E-mail

Oct 02, 2011 Josh Visser, CTVNews.ca Staff edmonton.ctv.ca

Inspired by protesters along Wall Street and in other U.S. cities, hundreds are expected to occupy Toronto's Bay Street in two weeks to air their various grievances against the financial system and its wealthiest companies.

The protest near Wall Street in New York is entering its third week, and doesn't appear to be slowing down. In fact, a police crackdown has only emboldened protesters and some are now expecting the "occupation" to continue into the winter.

 
BMO Canadian Housing Outlook: Tailwinds and Headwinds Point To Soft Landing Print E-mail

Oct 01, 2011 marketwatch.com

- Tailwinds include low mortgage rates, relatively low unemployment and strong immigration, while high prices, elevated household debt and slowing employment are cause for concern. - More buyers are turning to variable rate mortgages on expectations that rates could stay low for some time, or even decline. - Average Canadian house prices were a record two-thirds more than average U.S. house prices.

TORONTO, ONTARIO, Sep 30, 2011 (MARKETWIRE via COMTEX) -- After a decade of strong growth in the Canadian housing market, residential real estate is headed for a "soft landing" with prices moderating in the months ahead, according to a Special Report from BMO Economics.

 
BMO's Canadian Housing Outlook; Speculative fever still reigns in Toronto condo market Print E-mail

Sep 30, 2011 Ben Rabidoux theeconomicanalyst.com

BMO's Canadian housing outlook:

BMO is set to release its updated Canadian housing outlook.  It will be posted on their website tomorrow.  Here's a sneak peak at their conclusions, with a few of my own thoughts.

Low interest rates have fuelled Canada’s housing market in the past decade, pushing prices to new highs in most regions. However, a weaker economy and new mortgage rules have dimmed activity recently.

 
Inflation and the Bank of Canada's benchmark rate Print E-mail

 

 
Canada’s recovery: Good governance or just luck? Print E-mail

Sep 28, 2011 Stephen Gordon theglobeandmail.com

It is by now a commonplace to remark that Canada’s recession was much less severe than was the United States and in many other rich countries. On the other hand, it is also true that there were other rich countries that were even less affected that Canada: Australia, for example, sailed through the crisis almost without incident. What are the lessons to be learned from these comparisons? Were we luckier or better-governed?

 
Canada's housing market will slow, bank says Print E-mail

Sep 27, 2010 cbc.ca

Scotiabank says Canada's housing market is expected to see a modest slowdown in sales heading into 2012 and relatively flat prices, while several other countries will struggle.

The bank said in a report released Tuesday that Canada's housing market has begun to cool, but it remains a "notable outperformer" compared with other countries.

 
What’s the use of saving money? Print E-mail

Sep 27, 2010 Jason Kirby, and Chris Sorensen macleans.ca

How years of ultra-low interest rates have punished savers, rewarded spenders, and now might be smothering any hopes of recovery

Steven Patterson and his family moved to Vancouver from Cambridge, Ont., in mid-2008, just as the financial crisis hit. After years of scrimping and saving to pay off their first mortgage, they had earned a tidy profit when they sold the Cambridge house and put the proceeds into GICs, where the money would be safe and easily accessible should they decide to buy another home in B.C. Three years later, Patterson, a 42-year-old IT manager, is still sitting on the sidelines, renting, while real estate prices march ever upward in a city where a three-bedroom bungalow covered in warped siding can fetch $1 million.

 
Is Capitalism Preparing to Bury Itself? Print E-mail

Sep 26, 2011 Murray Dobbin TheTyee.ca

Choke consumers' wages and you choke the economy. Why don't our leaders see that?

Where is Henry Ford when you need him?

You may remember Henry -- the ruthless industrialist who nonetheless refused to be hobbled by suicidal ideology when it came to doing business. He realized as his workers cranked thousands of new cars off the assembly line that none of those workers would likely ever own one, because he didn't pay them enough. So he dramatically increased their wages. It was such a good idea that most industrialists followed suit and his practical approach was dubbed Fordism. It was the foundation of a high-wage economy, it lasted a very long time and it produced incredible real wealth for decades.

 


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