Canadian Housing Market and Economy
So, we are seeing that Vancouver and Toronto are starting to have sharp corrections in their respective condo markets and that sales and prices are dropping year over year for both condos and single family homes in both those areas and smaller areas like Winnipeg, Halifax, etc. What were bidding wars only a year ago are now houses sitting on the market for months.
It seems like a precarious time in Canada and, I would assume, that a sharp housing correction is going to be felt across the economy like it has in the US. Canadians have record debt, etc, etc...too many comparisons to the US crash to list.
Alberta has not been hit much yet, any thoughts on the trend in Calgary? I know that the new condo structure that was built by the university that had people waiting in lines to purchase for 300k+ a couple of years ago now has sales in the mid 200s.
What are everyone's thoughts on the prospect for the Canadian economy as a whole and, more specifically, the future for the Alberta and Calgary region?
My feeling is that with current societal priorities which will likely not change, for better or for worse Alberta in the near future will always be the strongest economic region in the country. But how strong will it be? Does anyone disagree?
Do you feel that the outlook is brighter than in the US? Fortunately, coastal California has a significant amount of wealth, but there aren't many other areas in the US that I'd consider living in the current economic climate.
It seems like a precarious time in Canada and, I would assume, that a sharp housing correction is going to be felt across the economy like it has in the US. Canadians have record debt, etc, etc...too many comparisons to the US crash to list.
Alberta has not been hit much yet, any thoughts on the trend in Calgary? I know that the new condo structure that was built by the university that had people waiting in lines to purchase for 300k+ a couple of years ago now has sales in the mid 200s.
What are everyone's thoughts on the prospect for the Canadian economy as a whole and, more specifically, the future for the Alberta and Calgary region?
My feeling is that with current societal priorities which will likely not change, for better or for worse Alberta in the near future will always be the strongest economic region in the country. But how strong will it be? Does anyone disagree?
Do you feel that the outlook is brighter than in the US? Fortunately, coastal California has a significant amount of wealth, but there aren't many other areas in the US that I'd consider living in the current economic climate.
Comments
The decades-long insanity continues for now, but "Winter is coming." While the ridiculous $542,174 average price is unsustainable, it is unpredictable when the bubble will finally burst.
You back on the pipe buddy? Not sure where you are getting this info from but house prices in Toronto are steady on the uprise with plenty of bidding wars. My neighbor took his house off the market last year because he couldn't get the ridiculous price he was asking. He just listed it this spring for $100k more than he was asking last year and sold it near asking in two weeks! Prices are crazy right now and will stay high as long as interest rates remain at all time lows.
My understanding is this (stolen from an article) and I realize that the Toronto market is very regional (and you are correct that Toronto pricing is still up YOY but I think it is driven primarily by the 1mil+ homes):
Officially, GTA’s housing market is one of tumbling sales and static prices. The media is still carrying stories about bidding wars and frustrated buyers paying $900,000 for $750,000 homes. But that is the flotsam left floating on still waters. The economic reality is that fewer deals, month after month, lead inevitably to price reductions, lost equity and recent buyers left underwater.
This week the evidence seems overwhelming. Despite it being Spring, and with some of the lowest five-year mortgage rates in history, sales are cascading lower in Vancouver, Victoria and Toronto. Transactions in Ottawa last month were off 16%, and condo prices have turned negative for the year. In Montreal, same story – condo values retreating while SFH sales are down 15%. In Halifax volumes are running 28% below year-ago levels. Even Calgary, now afflicted by falling oil prices and shutdowns in the tar sands, sales are trailing 2012 numbers.
In BC, prices are lower 8% on average. In Ottawa and Montreal, up 1% over 2012. In Toronto, it’s a 3% gain over last Spring. As I always point out, all real estate is local. And big markets like the GTA are comprised of dozens of micro-markets, each with their own supply-demand dynamic.
But there’s no fighting the trend. Housing as an asset class has run its course, inflated to the point of ugly obesity by an endless diet of addictive cheap debt.
The numbers show a different story for the condo market, no?
But sales are down, no?
same here in Milton, hot, hot, hot...