CANADIAN HOUSING STILL BUBBLY, BUT SIGNS OF SLOWING AT THE MARGIN

We saw another piece of Canadian housing data, with the release of the relatively new Teranet/National Bank House Price index for February.  This index can be dubbed as the Canadian “Case-Shiller” index because it uses the same methodology as the U.S. Case-Shiller index.

The year-over-year rate for the overall index continued to accelerate in February, to 9.9% from 7.5% in January.  However, as we saw with Tuesday’s U.S. Case- Shiller index, depressed levels from last year are boosting year-over-year comparisons and we will likely continue to see this until April.  Even with the increase in February, we are still off the record 14% YoY high posted in November 2006.  Toronto and Vancouver continue to be the frothiest markets, up 13.3% YoY (a record high) and 11.8% YoY, respectively.

On a monthly basis, we are starting to see some evidence of slowing as the national index was up 0.2% MoM, the smallest increase in 10 months.  Again, Toronto and Vancouver registered the highest gains (0.4% and 0.6% MoM, respectively) but Calgary and Ottawa actually saw prices decline on the month.

In today’s issue of Breakfast with Dave

• While you were sleeping: mixed action in global equity markets; bonds are roughly flat; commodities are firm this morning

• Equities discover our income theme: for the first time in six years, no S&P 500 company is going to be cutting their dividend payout

• Bleak job market outlook in the U.S.: of the 8 million jobs lost in the U.S. during the “Great Recession”, three-quarters were in positions that are not likely to come back

• Reality check for the big bold bullish take on the U.S. consumer

• What happens when the Bank of Canada goes for a hike?

• FOMC press statement: a non-event for the most part, although the Fed did update and modestly upgraded its macro view

• Bullish investor sentiment still not dented

……read full article HERE

……read summary HERE

• Canadian housing still bubbly, but signs of slowing at the margin

• Ban the bailout: we have governments bailing out banks, homeowner debtors, and now we have government bailing out governments — when does someone finally say, enough is enough!