Canada’s housing boom has ended for the second time since Douglas Porter; deputy chief economist at BMO Nesbitt Burns officially declared it “over” in mid-April. Stay tuned for further endings as we move through summer and into the fall. 🙂
In a report released this week by TD Economics, economists Craig Alexander and Pascal Gauthier said, “The long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale.”
In May, year-over-year price gains for existing home sales in Canada’s major markets fell to 1.1%, down from 8.6% just four months ago.
The report says that the cooling market is “nowhere as evident as in Alberta, with prices continuing to fall this year by eight to ten per cent from their peak.”
“The combination of significantly higher listings, reflecting the desire of homeowners to take advantage of the past increase in prices, and weaker demand, due to the past erosion in affordability, are leading to declining sales and softer price performance across the country, particularly in the west.”
“…Saskatchewan’s major markets offer an exception to the cooling trend on an annual basis, but this is mostly a question of timing. The price surge above 30% growth came late last year and much of the momentum is being carried into this year. But, if Regina and Saskatoon follow the path just recently threaded by Calgary and later Edmonton – and we think they will – Saskatchewan’s price growth will have come back down to earth by early next year. We are looking for 2-3% price growth in 2009, with a risk of a mild price correction.”
Not to be outdone, BMO economist Douglas Porter was quoted as saying, “Hey, I called it first!”
Well, not really, but he did throw this little gem forward in an interview with the Globe and Mail on June 27.
“It’s a bit unnerving to see how Canadian performance is beginning to look like that of the U.S. two years down the line.”
As disturbing as it is to see a “deputy chief economist” write reports in Comic Sans font, you have to admit that his graph is rather compelling.
“There is a litany of reasons why the Canadian market is different, but even a pale version of what we saw in the U.S. would not be good news,” said Porter.
The First “End” of Canada’s Housing Boom
TD Economics – Canada’s Housing Boom Comes to an End
Star Phoenix – Canada’s housing boom ends
Star Phoenix – National housing boom has come to an end
Globe and Mail – Housing Drop Looming in Canada?
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