Comments on: Canadian Real Estate Prices Are Falling Faster Than They Did In The Financial Crisis

By: Tom Wolfe

Tom Wolfe — Thu, 27 Oct 2022 11:29:39 +0000

In reply to J_Morrow. Funny! Funnier because it’s true and going to continue to be true. Gardiloo!

By: R.u. kiddingme

R.u. kiddingme — Mon, 24 Oct 2022 00:34:56 +0000

You’re wrong about the typical household in Calgary. According to the 2019 census More than 50% of albertans make 50k a year or less.

Average Millennial mom and dad make 44,000/y each after taxes and represent 33% of the workforce in Canada. The average home price in alberta was around $412,000 last I checked, and around 500k in calgary…

Please for the love of all that’s holy stop saying that a typical household here can absorb the price. The typical family here can’t even afford to buy a house in calgary.

By: Steve

Steve — Sun, 23 Oct 2022 05:36:38 +0000

In reply to Mike.

And when the rates don’t increase as much as what you hope for then what? Are these people who you predict will head for the exits become renters again? In the current rental market? Will the government reverse course and stop immigration?

What if the trickle down effect you describe remains only a trickle?

So many chicken littles out there who are going to be too scared to buy at lower prices anyway. If it drops 30% they’ll wait for 50%. If it went to to 1990’s prices they’d still be scared.

By: Bearish

Bearish — Sat, 22 Oct 2022 23:18:41 +0000

Much like Alex the housing market is dead.

By: Yoroshiku

Yoroshiku — Fri, 21 Oct 2022 21:05:17 +0000

In reply to dave frazer. It seems like a lot of sellers in the GTA simply took their houses off the market, assuming that this drop was just a blip, and that house prices would begin to climb steeply again in a few months time. But with mortgages getting more expensive, can everybody hang on indefinitely?

By: Alex

Alex — Fri, 21 Oct 2022 17:45:33 +0000

Let it collapse

By: Edward HC Graydon

Edward HC Graydon — Fri, 21 Oct 2022 05:04:04 +0000

Real home prices in Canada have historically grown at about 3% per year dating back to the early 1980s roughly reflecting inflation, real wage growth and gradually falling interest rates. In the current episode, even as inflation has accelerated to multi-decade highs, real home prices have surged by more than a third in the span of two years, clearly stretching beyond that long-run baseline growth trend. Historically, we have seen some dramatic deviations from trend, all of which were eventually corrected in some fashion. In one extreme example, real home prices surged 38% above trend in the late-1980s, and took 15 years to recover. By the early-2000s, however, housing was exceptionally cheap, which set the stage for the long bull market that followed. Notably, for most of the 2010s, housing was doing roughly what it should have been doing (recall the false bubble calls we were constantly arguing against), until BoC rate cuts in 2015 led to some froth in B.C. and Ontario into 2017—that quickly corrected with rate hikes. As of Q1, when we believe the market peaked, real Canadian home prices sat 38% above trend, the widest deviation in the past 40 years.

By this measure, the most froth has accumulated in the suburbs and exurbs of Toronto. While Toronto prices have risen 41% above trend, exurbs (using markets 1-2 hours outside Toronto) have run ahead by more than 70%. Cottage country has seen a similar surge. Some regions, however, barely look frothy at all. Alberta is a good example where, after five years of declining prices leading into COVID, the market is still just catching up to its long-term baseline. Other markets, such as Vancouver, Montreal and Atlantic Canada are frothy, but not to the extent of Southern Ontario.

By: Mike

Mike — Fri, 21 Oct 2022 00:59:43 +0000

Further interest rate increases by the BOC will put additional pressure on the real estate market, particularly those who purchased at overpriced market prices. Higher interest rates will drive many of them out of the market, putting additional downward pressure on real estate prices.

By: Scott

Scott — Thu, 20 Oct 2022 21:41:10 +0000

and the 300k new units coming on stream this year should really help with prices…

By: J_Morrow

J_Morrow — Thu, 20 Oct 2022 18:02:08 +0000

In reply to dave frazer. I’ll take ‘The Latter’ for $1000, Alex.