Sunday , 22 October 2017


Unlike the U.S and U.K, Canada's Home Prices Are STILL Rising!

Canada, France and Switzerland stood alone among nine markets measured in recording annual price gains in home prices, based on second-quarter data, with inflation-adjusted price increases of 5%, 5% and  4%, respectively, compared to declines of 6% in the U.S., the U.K. and Australia, 10% in Spain and 14% in Ireland. In fact, Canada’s home prices have escalated 44%, on average, since 2005 – and 68% in Vancouver – and they are up 7.7% in the past 12 months! Words: 1244

Reports by Canada’s Bank of Nova Scotia, National Bank (see here) and the Canadian Real Estate Association (see here) paint a rosy picture for the housing scene in Canada over the past decade with no declines foreseen, on average, in the near future. Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) has amalgamated the findings of these three reports and comments on said reports as found in the Globe and Mail into this article to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. 

1. Senior economist Adrienne Warren of Canada’s Bank of Nova Scotia says in her report that:

Canada’s Home Prices (Major Cities) Went UP 5.27% in Last 12 Months

Scotiabank expects housing demand around around the world to remain moribund until the recovery picks up and, while Canada’s real estate market is notable for its resilience and longevity, Warren anticipates, on balance,  a modest slowdown in the volume of sales transactions heading into year-end, alongside relatively flat prices.

 

2. The latest Teranet-National Bank National Composite House Price Index reports that: 

Canadian Home Prices Have Jumped 44.27% Since 20o5

As the chart below shows Canada has not experienced a housing bubble with prices continuing an almost uninterrupted advance as seen in the chart below:
 
Canadian house prices continue to increase in 2011
 

Since Teranet first started tracking prices in June 2005 with a base level of 100, home prices have jumped 44.27%. The Vancouver index leads the pack at 167.77, suggesting prices have gone up 67.77% since 2005. Toronto, meanwhile, has the lowest index rating at 131.26, meaning prices have accelerated “only” 31.26% in that time.

House Prices Went UP 1.3% in July in Canada’s Major Cities

House prices in 6 of Canada’s major cities across the country jumped 1.3% this past July, compared with the previous month That is the fourth straight monthly increase of more than 1% and the eighth straight rise in a row. The index is also up 5.27% compared with a year ago.

Prices were up in five of the six major metropolitan markets surveyed in July:

  • Calgary led the pack with a 2.3% increase (+0.9% y/y),
  • Toronto was up 1.7% (+4.8% y/y), 
  • Ottawa came in at +1.o% (+4.1% y/y),
  • Vancouver was up 0.9% (+8.5% y/y), yes, 8.5%!,
  • Montreal rose +0.5% (+6.0% y/y) and
  • Halifax -0.9% (+3.3%y/y).

Who in the world is currently reading this article along with you? Click here to find out.

3. The latest Canadian Real Estate Association reports that:

Canada’s National Average Home Price is $349,916 (Canadian dollars)

The national average price for homes sold in August stood at $349,916, down from $372,700 in June. Despite the slowdown, however, prices have nonetheless gained 7.7% in the past 12 months. This number is at odds with the Teranet-National Bank National Composite House Price Index number of 5.27% because that report tracks prices in only 6 of Canada’s largest metropolitan cities whereas the Canadian Real Estate Association (CREA) numbers reflect the sale price of homes in every community across the country regardless of population.

 

CREA’s chief economist Gregory Klump says,

Earlier this year, the national average price was being skewed upward by sales in some expensive Vancouver neighbourhoods, but this factor is now diminishing. Upward skewing of the national average price is also shrinking due to overall sales trends in Vancouver, and most recently in Toronto…Economic and financial market headwinds outside Canada are keeping interest rates lower for longer [and] those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.

 *http://www.theglobeandmail.com/report-on-business/three-charts-to-start-your-week/article2188519/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Home&utm_content=2188519

Related Articles:

1.  We Can Now Rule Out Another Housing Collapse, Can’t We?

According to both the Case Shiller and RadarLogic indices housing prices have been essentially flat for the past 2 years after having fallen by a third from their 2006/7 highs. [That being said, surely we can now rule out another collapse, can’t we?] Words: 764

 
As bad as the housing crisis has been over the past three years, it has only been a warm up to what we have headed our way… [In fact,] the forecast is horrific, to say the least! 28% of US homeowners already owe more on their mortgage than their home is worth [and]… 27% of American homeowners are considering walking away from their mortgage…This is going to significantly drive home prices further down. [Let’s look at the details.] Words: 657
 

3%! Simply amazing. 3% isn’t even close to serious. If you are only able or willing to put down 3% you simply aren’t serious about homeownership. It’s laughable…yet by 2007 40% of all mortgages had less than 3% downpayments…Evidence is now pouring in…that the financial crisis of 2008 was nearly exclusively created by government’s misguided interventions and manipulations of the housing market. [Let me explain further.] Words: 671

Yes, you read that right; get ready for the next housing boom. You’re probably thinking, “How could that be with all the mortgage delinquencies and foreclosures going on, and the record levels of housing inventory? Well, it’s not going to happen soon – [probably] not for several more years – but it’s coming. [Let me explain to you why it is inevitable.] Words: 589

The rat-through-the-snake process of working down existing and prospective distressed properties is likely far from over, and how that process plays out will no doubt have an impact on how much housing prices will ultimately adjust. [Let’s take a look at some differing points of view in that regard.] Words: 497

The housing crash is still in process and here are 10 reasons why it is still a terrible time to buy. Words: 1670

If you think home prices have hit bottom and are now headed back up for good, think again! Round two is about to begin. Words: 552

8.  Ever Increasing Foreclosures Mean Low House Prices for Many More Years

Anyone who sees a rising pool of millions of delinquent mortgages as the foundation of a recovery in housing valuations isn’t considering the feedback loop which is now firmly in place. The foreclosure pipeline will be full for years to come precluding any “recovery” in housing valuations as supply will swamp demand. Words: 385

9.  Mortgage Interest Deductibility: An Unfair Subsidy for the Rich

The MID is as inequitable as it is inefficient. It is the quintessential “upside-down subsidy: the greater the need, the smaller the subsidy.” It provides 10 times the tax savings for households with income exceeding $250,000 compared to households earning between $40,000 and $75,000. It is effectively worthless for low- and middle-income households, such that repealing it would significantly increase the progressivity of the income tax. Words: 812

Real estate has definitely not bottomed in the U.S., and probably not anywhere else either. You have to take a long-term view of this. At this point in time I am completely uninterested in speculating in U.S. real estate – and I don’t foresee being interested for at least five years. I reserve the right to change my mind, but I think it’ll be at least five years. Words: 1340