…another report released.

Kiyoko Fujimura – Buzzbuz­zhome Corp.

If you fol­low Buzzbuzzhome’s Blog! then you prob­a­bly know that we’ve been post­ing about the poten­tial hous­ing bub­ble. And as much as we’re sick of talk­ing about it, there’s been yet ANOTHER study released by yet ANOTHER think tank. We’re grow­ing a bit tired of it, but it’s what peo­ple are talk­ing about. So here goes yet ANOTHER post.

Okay, here we go.

The study was released by the Con­fer­ence Board and con­cluded that (drum roll please) we are NOT in a hous­ing bub­ble. I repeat, we are NOT in a hous­ing bub­ble.

So how did they come to this con­clu­sion? Basi­cally what they said was this: our hous­ing mar­ket has been in a state of delir­ium for the past lit­tle while, but it doesn’t nec­es­sar­ily fol­low that we’re going to see prices go into a free-fall like our Amer­i­can neighbours.

Accord­ing to the Finan­cial Post:

“Signs of a slow­down were unmis­tak­able in Sta­tis­tics Canada’s report. It showed weak­ness in res­i­den­tial per­mits was much more broadly based than in the non­res­i­den­tial sec­tor, with declines reg­is­tered in six of 10 provinces, said Sco­tia Cap­i­tal econ­o­mist Derek Holt. Yet, he added, the report “is direc­tion­ally in line with expec­ta­tions for softer hous­ing mar­kets,” and that the num­ber of res­i­den­tial per­mits “nonethe­less remains 31% higher than a year ago.”

The report goes on to indi­cate that although we will see a slow­ing hous­ing mar­ket in the next few months, the slow­down is due to spe­cific fac­tors (i.e. the intro­duc­tion of the HST, declin­ing con­sumer con­fi­dence, a gen­eral slow­down of the econ­omy, wor­ries about the US econ­omy and Euro­pean debt concerns).

And while those that insist there is a bub­ble point to the fact that prices are well above the his­tor­i­cal aver­age in six major mar­kets, that doesn’t mean there’s a bub­ble. The report points out that sales could never have sus­tained the level we saw in 2009 and the first half of 2010.

The report fur­ther indi­cates that the US cri­sis was caused by fac­tors that don’t exist in Canada which include tax deductibil­ity for mort­gages and the inabil­ity for banks to go after other assets when an indi­vid­ual defaults on their mortgage.

Okay, so yet again we’re con­clud­ing that there is no hous­ing bub­ble in Canada.

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