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Toronto New Condo Sales Plummet, While Suburban Detached Homes Sales Rise

Greater Toronto new home sales climbed last month. Numbers from Altus Group show new home sales increased in March, attributed entirely to a rise in the 905. Don’t get too excited though. The only reason new home sales increased, was because the bar was set so low last year. Last month was still the second […]

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Residential Mortgage Credit Growth Remains Sluggish in March

Amidst a continued slowdown across the national housing market, which includes national home sales dropping to a decade low in March, Bank of Canada Governor Poloz suggested, “We’ve gone from boom to bust, of course, with lots of new policies put in place.” Ironically the Bank has recently engaged in the purchasing of Canada Mortgage […]

The post Residential Mortgage Credit Growth Remains Sluggish in March appeared first on Steve Saretsky.

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Canadian Mortgage Debt Prints Slowest Growth For The Month Since 1983

Canadian mortgage debt printed a record high, but is still growing much slower than usual. Bank of Canada (BoC) numbers show the balance of mortgage debt printed a record high in March. The record debt came with the slowest pace of growth for March since 1983. Canadian Mortgage Debt Now Over $1.55 Trillion The balance […]

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This Week’s Top Stores: How Money Laundering Sends Real Estate Prices Soaring, and Canadian Buyer Exuberance Crashes

Time for your weekly cheat sheet on this week’s most important stories. Canadian Real Estate How A Little Money Laundering Can Have A Big Impact On Real Estate There’s no way there’s enough money laundering in Canadian real estate to affect prices, right? We take a dive through how asset prices are born, and how […]

The post This Week’s Top Stores: How Money Laundering Sends Real Estate Prices Soaring, and Canadian Buyer Exuberance Crashes appeared first on Better Dwelling.

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“Psychologically, They’re Ill-Prepared” – “Canadian Chaos Looms”

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While Canadian bank advocates and their skeptics exchange words, the formerly-white hot housing market is now in deep freeze. March sales in Vancouver collapsed by 31.4% year-over-year according to the local real estate board, the worst showing since 1986 and down 46% from the 10-year average for March. Prices also lurched lower, with the benchmark detached home price falling 10.5% year-over-year to C$1.44 million ($1.08 million). Things are more stable in Toronto, where March sales and benchmark prices were little changed from a year earlier, but those figures remain 40% and 14% below their respective levels from March 2017.

As the housing market sputters, the highly-leveraged Canadian consumer displays increasing signs of distress. According to the Bank for International Settlements, Canada’s household debt stands at 100.2% of GDP as of the end of September, by far the highest ratio among G7 economies (the U.K. is next at 86.5%), while the debt service ratio, or the percentage of disposable income allocated to principal and interest payments, rose to 14.9% in the fourth quarter per Statistics Canada, just shy of the 2007 peak.

That debt burden is starting to weigh on consumers. Auto loan delinquencies rose to 0.97% at year-end according to Equifax, Inc., the highest since 2009. At the same time, 36% of new auto loans in the fourth quarter were leases, the largest such share since 2007. Bill Johnston, vice president of data and analytics at Equifax Canada Co., noted that “we’re starting to see consumer behavior shift to keep the payments as low as possible.”

– excerpt from ‘”Psychologically, They’re Ill-Prepared” – Canadian Chaos Looms’, from Grant’s Interest Rate Observer, via Zero Hedge, 11 Apr 2019

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Keeping Up With Other Bubbles – Australia Suddenly Not Running Out Of Land Anymore – “Aussie House Prices Could Halve”

It was supposed to be different there, too

House prices in Sydney and Melbourne could fall by up to 25 per cent this year alone and “there’s a chance they could fall by half” in the coming “property bloodbath”, an economist has warned.
LF Economics founder Lindsay David, who has been warning of the looming property crash for the past five years, said in a report today the recent house price falls were just the beginning.
CoreLogic data for January showed Sydney and Melbourne prices were now 12.3 per cent and 8.7 per cent down from their respective peaks in July and November 2017, with Melbourne falling at “the fastest rate ever seen”.
“We think there’s a chance property prices could fall by half in Sydney and Melbourne over the long run,” David said.
“I wouldn’t be surprised by falls of at least 40 per cent. When all hell breaks loose you’ve only got so many buyers out there.”

His base case of 20 per cent falls in calendar 2019 is significantly more bearish than other experts. AMP Capital is tipping total peak-to-trough falls of 25 per cent in Sydney and Melbourne, while UBS is tipping 25 per cent with a “rising risk of 30 per cent”.
David bases his forecasts largely on the “debt accelerator”, which is strongly correlated with house price growth six months forward. Latest data indicates the debt accelerator is “falling sharply” in Sydney and Melbourne.
If that happens, Sydney and Melbourne “will suffer peak-to-trough falls never experienced before, outside of the 1890s depression and real estate collapse”.

– excerpt and image from ‘Property bloodbath’: Aussie house prices ‘could halve’, Frank Chung, news.com by way of New Zealand Herald, 20 Feb 2019

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