Tag Archives: housing market crash
Canada may dodge housing hard landing, Flaherty says
John Tilak – Reuters
Pressures in the Toronto and Vancouver housing markets are moderating, Canadian Finance Minister Jim Flaherty said on Thursday, with neither a bubble nor a hard landing in sight for the country’s property market.
“I don’t think there is a bubble, or a danger of a bubble in Toronto and Vancouver. I’m actually comfortable with the fact that we’ve seen some moderation in pressures in that market, both of those markets and across the country,” Flaherty told reporters.
“I hope the market will discipline itself… Some modification is better than having some sort of hard landing.”
Mindful of the U.S. housing market crash that triggered the global financial crisis, Flaherty in June tightened rules on government-backed mortgages for the fourth time in four years.
Industry reports released on Wednesday showed Canada’s post-recession property boom is displaying fresh signs of weakness due in part to the mortgage-rule changes, with sales volumes dropping even as average prices rise.
Comment: I am not sure it is weakness as much as it is just moderation.
In Vancouver, Canada’s most expensive market, average prices posted modest decreases in the third quarter, particularly for condos.
In Toronto, average house price gains ranged from 2.7% to 5.9%, while demand fell modestly.
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Contact the Jeffrey Team for more information – 416-388-1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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Ottawa pressures banks
CTV News
Alarm bells are starting to ring in Ottawa over how easy it is for some people to borrow money.
As The Globe and Mail’s Jeremy Torobin and Grant Robertson reported, Canada’s Finance Department has been telling bankers it’s troubled by some lending standards and record low mortgage rates.
The Office of the Superintendent of Financial Institutions, the banking regulator, is also concerned that some people, who haven’t had to prove how much they earn, are finding it too easy to get mortgages and home lines of credit.
This comes as debt burdens among Canadian families continue to rise, and after months of warnings from the Bank of Canada and the Finance Department.
It also comes as some worry over rich house prices, particularly in Vancouver, though there’s some fretting as well about Toronto’s condo market.
Bank of Montreal said in a report this week, though, that it expects no U.S.-style housing market crash
“In our view, the housing boom will more likely cool than correct, even in condo–driven Toronto – the target of many scary headlines,” said BMO chief economist Sherry Cooper and senior economist Sal Guatieri.
“The possible exception is pricey Vancouver where the number of unoccupied newly built condos is high owing to the Olympic Village construction in 2010.”
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Contact the Jeffrey Team for more information – 416−388−1960
Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
—————————————————————————————————–
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Is it a bubble or a soft landing?
REMonline.com
Is Canada’s housing market “an accident waiting to happen” as a recent report suggests, or are Canadian housing policies working well to “mitigate the risk of a massive wave of defaults in the future” as another report suggests?
The first report, by David Macdonald of the Canadian Centre for Policy Alternatives, says Canada has a housing bubble because house price increases in Toronto, Vancouver, Calgary, Edmonton, Montreal and Ottawa between 1980 and 2010 “are outside of a historic comfort level.”
“The bursting of housing bubbles is a rare event in Canada, but the steep rise in house prices in so many cities displays all the hallmarks of an accident waiting to happen,” says Macdonald. “As house prices rise outside of their historical range they become much more susceptible to mortgage rate changes. The hottest six real estate markets could be in for a correction at best or, at worst, a bubble burst. Rate setters at the big banks are in the driver’s seat now as mortgage rates inch up. They need to hit the brakes lightly.”
But another report, by Jim MacGee of the C.D. Howe institute, concludes that Canadian housing policies have done a good job to ensure that a U.S.-style housing market crash is not likely to happen here.
“Canadian housing policies, which avoided the sharp decline in underwriting standards seen in the U.S, worked well in reducing the possibility of a housing bust in Canada during 2008-2009, and continue to mitigate the risk of a massive wave of defaults in the future,” says MacGee.
In a report released on Tuesday, Canada Mortgage and Housing Corp. predicts that existing home market conditions will remain balanced during the next two years as MLS sales ease and inventory levels remain elevated. It forecasts that “existing home sales will be in the range of 450,000 to 485,700 units in 2010, with a point forecast of 463,800 units. In 2011, MLS sales will move lower and are expected to be in the range of 425,000 to 490,700 units, with a point forecast of 456,000 units.”
It says that with an improved balance between demand and supply, the average MLS price is expected to edge lower through the end of 2010 and then rise modestly in 2011.
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Contact the Jeffrey Team for more information - 416-388-1960
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Related posts:
- Housing in for soft landing: CMHC Slow deceleration expected for prices and construction By Colin Perkel...
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- Soft landing predicted for real estate By Don MacDonald – The Montreal Gazette (Canwest News Service...
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