Canada Home Sales Have Sunk

05/15/201810:01 EDT | Updated 23 hours ago
Canada Home Sales Have Sunk To Their Lowest Level In Morethan 5 Years
Average sale prices are also down.

Bloomberg viaGetty Images
A pedestrianpasses in front of a home for sale in the Le Plateau Mont-Royal borough ofMontreal on April 14, 2018.
TORONTO — The Canadian Real Estate Association saidnational home sales sank 13.9 per cent year-over-year to the lowest level
in more than five years in April, just as the number ofnewly-listed homes fell to a nine-year low for the month.
The decreases amount to a 2.9 per cent drop in salesbetween March and April, bringing the total to 36,297.
During that same time listings fell to 67,616, taking a4.8 per cent hit — a sign that the flurry of activity that usually kicks offthe
spring real estate market has failed to materialize.
CREA attributed the subdued level of activity to thestricter regulations for uninsured mortgages that the
Office of the Superintendent of Financial Institutionsintroduced on Jan. 1.
Its president Barb Sukkau said the regulations have"cast its shadow over sales activity,’’
while its chief economist blamed them for having"destabilized market balance for housing markets in Alberta,
Saskatchewan and Newfoundland
CREA said 60 per cent of all local markets were balancedin April, but that sales were down in 60 per cent of all markets,
led by the Fraser Valley, Calgary, Ottawa and Montreal.
Similarly, activity was below year-ago levels in about 60per cent of all markets, which was "overwhelmingly’’
led by B.C.'s lower mainland and markets in and aroundOntario’s Greater Golden Horseshoe region.

CREA also said the country has experienced a decrease inthe non-seasonally adjusted national average sale price,
which dropped by 11.3 per cent year-over-year last monthto just over $495,000.
That number is well below the April averages for marketsin B.C. and Ontario that overheated last year,
causing both provinces to spring into action to cool thesector.
B.C.'s most recent budget introduced a speculation taxtargeting both foreign and domestic buyers not paying tax in the province.
Last April, the Ontario government aimed to quell itsroaring markets with expanded rent controls,
a plan to ensure property tax parity for new apartmentbuildings and legislation that would allow
Toronto and other municipalities to implement a vacanthomes tax.

Thanks for the post. My phone has been unpredictable. This is typically the busy time of year.

Once again that truth is being manipulated by CREA.

In this report Home sales drop as weaker markets ‘destabilized’ by new stress tests: CREA - The Globe and Mail it leads with a repeat of what was in Roy’s original post.

Namely “The federal government’s new mortgage stress-test rule has “destabilized” weaker housing markets by making it harder for buyers to afford new homes, according to Canada’s national association of real estate agents.”

In fact it’s done the exact opposite. The market has stabilised. People are no longer paying too much for homes, people are no longer being allowed to over-extend themselves.

A quote from a Realtor says it all “The tightening of the mortgage rules certainly has made it a little tougher to qualify and buyers who maybe were not properly pre-qualified can’t buy the house in the range they wanted to buy in”.

Well maybe they should be looking to buy in that price range in the first place, and maybe the homes in that price range are not valued at their true rate.

It’s called supply and demand people. Borrow too much and you are going to lose the house anyway, so why put yourselves through the stress and worry in the first place.

The prices will eventually come back down to where they really belong, and then people will be able to afford them again.

Canadian real estate prices see biggest drop worldwide. Canada’s housing market was the fastest rising in the world, just a few months ago. Now we’re claiming the opposite title.
by Daniel Wong Jan 29, 2018

Canadian real estate prices were the fastest rising in the world, just a few months ago. Now we’re claiming the opposite title, as the market explores where prices should be. Newly released Federal Reserve Bank of Dallas (the Dallas Fed) numbers, show a decline in home prices for the third quarter of 2017. This is the first time in over five years that Canadian real estate prices have declined for a quarter. Despite the quarterly drop, prices still remain significantly higher than the year before.

Before we all go into panic mode, House prices NEED to be re-adjusted. They are too-high. When kids and the average worker cannot afford to buy a house without putting themselves into almost bankruptcy, the system of home ownership has broken down.

Look at the rate of inflation over the last 10 years.

It 2-3 percent on average.

Now look a the average price rises for homes.

If you’ve owned a home for 10-15 years you made a good investment, but it’s now too expensive to buy for most people getting into the market.

Just like other investments, you can expect them to go down, as well as up. The difference between stocks and houses is that the roller-coaster ride is a lot longer for houses.

Take a look at the country comparisons in Robert’s link.

Canada has gone nuts on the upclimb. Cheap money, low-interest rates, a crappy dollar attracting foreign purchases.

We had the long, slow steady climb to the top, we are now about to get a long, slow, but really scary ride to the bottom.

Take note of the footnote in Roberts link

“It could also be the beginning of a broad market correction, like that seen in 1990. The most interesting takeaway is this break occurred starting six months **before **OSFI mortgage rules were rolled out to cool conventional mortgage borrowing.”