Comments on: Canada’s Real Estate Correction Is Far From Over: Oxford Economics

By: Kevin

Kevin — Fri, 11 Aug 2023 19:11:14 +0000

Bill’s a nut, but Vancouver homes showed a 2.0489% CAGR since 2016. A buyer is only ahead of someone that kept their money under their mattress.

I don’t think we’ll see homes in Vancouver under $1 million ever, but they’ll stagnate in real terms over time at some point.

By: Tammy Elesko

Tammy Elesko — Wed, 09 Aug 2023 01:45:50 +0000

In reply to Frank. Agree. Those waiting for Vancouver houses to drop below $1M will be left out of the market. I actually feel sad for those that follow Bill Fergusons Facebook group. He's doing a disservice for his members. If they had bought homes in 2018 when he started his page they would be way further ahead. Instead, he censors all dissenting posts and blocks all members that stray from the narrative. Maintaining the biased illusion that his opinions are correct.

By: Frank

Frank — Tue, 08 Aug 2023 20:07:44 +0000

Supply and demand matters. When manipulated statistics color the landscape and wages have not kept up with the economy, what would you expect? There will be no major correction and banks are seeing to it by extending amortizations . Soon intergenerational mortgages will be here. Those hoping for a massive correction will ne disappointed.

By: Frank

Frank — Tue, 08 Aug 2023 18:32:17 +0000

Paint it any color you like, there is still and will be a housing shortage for some time to come. Supply , demand is low due to manipulation of stats. Let’s not forget, wages have not kept up at all , and earn over $100k a year, 40% in payroll tax, not to mention tax on fuel, food, goods, services, property tax, no wonder the Gov has a triple A credit rating , on the backs of the working class.

By: Frank

Frank — Tue, 08 Aug 2023 18:27:53 +0000

In reply to Tammy Elesko. Wouldn't be the first time

By: Tammy Elesko

Tammy Elesko — Mon, 07 Aug 2023 22:17:17 +0000

I tried to post a comment that without a change to the mandated immigration levels and lack of new supply entering the market, Canadian real estate will only increase. Why was it not posted? Does this site only accept comments falling within it’s narrative and confirmation bias?

By: Dennis_K

Dennis_K — Mon, 07 Aug 2023 13:22:43 +0000

I’m not sure if the ‘measure’ of price changes matters so much, in comparison to what the costs actually are, and what people are earning, in real dollars. As other
contributors have noted, (relative) stats can be manipulated to suit whatever story
you want to tell.

Looking at the National Bank of Canada Housing Affordability Monitor for Q2 of 2023 (dated June 1, 2023), it’s still showing a clear discord between median (household) incomes and what they define as Qualifying Incomes for a composite of all dwelling types in each city across Canada (see their Table 1). Only in Quebec City are the numbers close, with Edmonton a further second place (and Winnipeg thereafter). Multiples of home prices to incomes for those three cities currently sit at just under 5:1, which was traditionally the upper threshold of affordability pre-2000. Home price to median income multiples for Toronto (12.4), Vancouver (14.2), Victoria (12.6) and even Hamilton (10.0 – which can be considered a surrogate for the extended region around the entire Greater Toronto Area) are still too great for an average household to afford.

While I believe the decline in prices is indeed a good (and necessary) trend, I still see much room for affordability improvement.

By: Tammy Elesko

Tammy Elesko — Sun, 06 Aug 2023 00:20:47 +0000

1,000,000 new immigrants every year. Only 200,000 homes built annually. Prices will not drop. Canadian real estate is still a great long term investment especially with the capital gains exemption on your primary residence.

By: Kejake

Kejake — Sat, 05 Aug 2023 15:49:31 +0000

In reply to Omar. Prices have already climbed back up and average across Canada is up year over year 6.7%. We have a massive supply problem and with 500,000 per year coming to Canada nothing short of an economic collapse will stop the real estate market. Just increase mortgage amortization to 50 like Australia. More preferable than economic disaster.

By: Andrew Baldwin

Andrew Baldwin — Sat, 05 Aug 2023 15:23:28 +0000

When does a housing correction becomes a housing bubble bursting? If this is not what will happen, it is certainly a wake-up call. Statistics Canada, the Department of Finance and the Bank of Canada have all been guilty of incompetence in this regard. The Bank of Canada has used a household-oriented measure of consumer price inflation as its target inflation indicator ever since the beginning of inflation targeting in February 1991. It has resisted even the most obvious reforms, like switching to the CPI for All-items excluding mortgage interest as the target indicator. What is really needed is a proper macroeconomic measure of consumer price inflation to be used as the Bank of Canada’s inflation target, as argued in the paper that I co-authored in 2017, “What Should an Inflation Index Be Measuring?” Ideally, owner-occupied housing would be measured using a net acquisitions approach, that would give a MUCH bigger role to housing prices than the official CPI. It may surprise people that the only component of the official CPI that actually relates to current house prices in isolation is the replacement cost of depreciation component, and it is really an imputation for the assumed increase in new dwelling prices. Another component, land transfer taxes, where one would expect house prices to play a role, isn’t properly measured at all. It is proxied, or at least was until recently, in a manner too crude to be believed. Canadians need a real macroeconomic consumer price inflation measure that will protect them from housing bubbles. When will we get one?