Tuesday, July 6, 2010

Canadian RE Update

July 6, 2010 : Vancouver Housing Sales Plunge BNN

Vancouver's housing sales plunged 30 percent in June from a year ago. Is this a sign of things to come for the rest of the Canadian real estate market? BNN asks Brian Ripley, CEO, Oakes Ripley & Associates.  "Top is in...wages falling"

Drop in home sales may be sign of peak

Existing home sales dropped sharply in Canada’s two most expensive markets, a further indication that the real estate market may have peaked.

House prices and sales to decline, market survey says

OTTAWA — House prices continued to climb higher across Canada in the second quarter of 2010, but sales and prices are expected to fall in the coming months, according to a Royal LePage House Price Survey and Market Forecast released Wednesday.

Canada’s Housing Bubble About to Pop? 

House sales in Vancouver and Calgary are plummeting. Is the top in Canada’s ridiculously inflated housing bubble finally in?

Canadian May building permits unexpectedly plungeOTTAWA — The value of building permits fell by a much-larger-than expected 10.8 per cent in May from April, slipping to $6 billion, Statistics Canada reported Tuesday.
Analysts polled by Bloomberg had called for a two per cent month-over-month drop.

Vancouver home sales drop sharply

Vancouver's housing market slowed considerably in June, with 30 per cent fewer sales than a year ago.

Toronto house sales sink 23%

Toronto-area Realtors sold 8,442 resale homes in June, a 23 per cent drop from the level of the same month a year ago.

Is Canada’s Housing Market Going Bust?

This morning, Statistics Canada reported a staggering 10.8% drop in Canadian building permits. Permits for residential construction decreased 5.3% while non-residential construction fell 18.3%. So, is the Canadian real estate market finally reverting to the mean? It may be too early to make a comprehensive statement, but the leading indicators are starting to look soft — especially since over the last year, “the average home price [in Vancouver] has risen 14%, to around C$1 million.”As those in the US know, once the bidding lust for houses starts to wane, everyone seems to awaken and ask, “Wait a minute. Is a 2,000 square foot house really worth over $1 million?” These are the inquiries which turn real estate dreams into nightmares.

Vancouver Home Sales Drop 30 Percent , Calgary 42 Percent - First Comes Volume, Then Comes Price; Canada Housing Peak is Finally In
Housing Collapse Cascade Pattern
  • Volume drops precipitously
  • Prices soften a bit
  • Inventory levels rise slowly
  • High-end home prices remain relatively steady for a brief while longer
  • The real estate industry tries to convince everyone it's "business as usual" and homes are affordable because rates are low
  • Bubble denial kicks in with media articles everywhere touting the "fundamentals"
  • Stubborn sellers hold out for last year's prices as volume continues to shrink
  • Inventory levels reach new highs
  • Builders start offering huge incentives to clear inventory
  • Some sellers finally realize (too late) what is happening
  • Price declines hit the high-end
  • Increasingly desperate sellers get creative with incentives, offering new cars, below market interest rates, trips, etc
  • Gimmicks do not work
  • Price declines escalate sharply at all price levels
  • The Central Bank issues statements that housing is fundamentally sound
  • Prices collapse, inventory skyrockets, and builders holding inventory go bankrupt

Some of those may happen simultaneously or in a different order, but the whole mess starts with a huge plunge in volume.

China's property market braced for 30pc drop

Standard Chartered has told clients to prepare for a fall in property prices of up to 30pc in Beijing, Shanghai, Shenzen, and other large cities in China as the delayed effects of monetary tightening begin to bite

Ken Rogoff: "China Property Market Collapse Starting"

US - New Loan Delinquencies on the Rise Again

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