Economic Outlook

The Most Splendid Housing Bubbles in Canada, May Update

Home prices across major metros in Canada ticked up 0.5% in May from the prior month, the slowest rise for any May in the 21-year history of the Teranet-National Bank House Price Index. “If seasonally adjusted, the index would have been down 0.4% on the month,” the report said. But real estate is local, with wide variations from market to market, and so here we go.

Vancouver:

In Greater Vancouver, house prices, instead of rising seasonally, declined 0.2% in May from April, the 10th month in a row of declines, according to the Teranet-National Bank House Price Index. The index is down 5.0% from the peak in July 2018, the sharpest 10-month decline since July 2009. And it’s down 4.1% compared to May 2018…CLICK for complete article

Four Ways The Trade Wars Are Undermining Commercial Real Estate

This one was suggested by our friends at Hawkeye Wealth. 

The uncertainty associated with real and potential trade wars is having an effect on our economy. While tariffs’ relationship to real estate is not apparent, the impact on commercial real estate (CRE) is real….CLICK for complete article

Spring Hasn’t Sprung for Vancouver’s Real Estate Market

Eitel Insights: May’s average sales price was $1.586 for Greater Vancouver’s Detached Market. The lowest such price for May in the past 5 years. Far from the peak of the Market in May 2017 when prices were at 1.830 Million.

As Eitel Insights has predicted the downtrends have taken hold of the Greater Vancouver Prices, and we will be continually testing previously established prices until the market bottoms likely in 2021 at either a 24% – 31% total correction.

Eitel Insights: The amount of available inventory continues to climb causing more of a competitive climate for sellers to achieve a sale. May 2019 saw 6771 active detached properties across Greater Vancouver, compared with only 4830 in May of 2016.
The inventory is in a strong uptrend with listings growing each quarter.

Eitel Insights: Yes, the sales numbers increased to 918 detached sales in May, the most in the past 12 months. However far from the peak of our spring in 2016 when in March sales were at 2150, and in May of the same year sales totaled 1873. A “properly priced” will always be able to achieve a sale, but the proper price is ever decreasing.

The demand has fallen off a cliff as the attached charts demonstrate. Also notice the downtrend in sales is sharp but there is a longer more prolonged downtrend that will force the market lower after this short term bump in sales comes to an end.

Private Real Estate Trust Launch Event

TVC Private Real Estate Trust is pleased to invite you to join them in Victoria, Vancouver and Calgary to learn more about the opportunity.
Key focus of the trust is :

  • Focus on capital preservation
  • Return of investor capital plus 7% hurdle rate before profit split
  • Diversified across 5 real estate classes
  • Quarterly redemptions available
  • Term approx 7+ years
  • Eligible for RRSP/TFSA

Victoria May 7th @ 6:30pm – CLICK HERE to register

Vancouver May 8th – CLICK HERE to register

Calgary May 9th @ 6:30pm – CLICK HERE to register

Mortgage stress test accounts for up to $15B drop in new mortgages in 2018: CIBC

Ottawa’s new mortgage stress tests accounted for at least half of the decline in new mortgages started last year, according to a new report by CIBC that calls for the measure to be revisited amid a falling housing market.

The total value of new mortgages fell by…Click here for full article.

The Most Splendid Housing Bubbles in Canada Deflate

Canadian housing markets are in a category of their own. No housing market in the US – no matter how crazy Housing Bubble 1 was, which began to implode in 2006, or how crazy Housing Bubble 2 is or was – can hold a candle to the most splendid housing bubbles in Canada. Instead of a Financial Crisis and a mortgage crisis and Housing Bust 1, the bubbliest Canadian markets only had a little-bitty dip, and within months were back on track to what would be an 18-year housing boom that is now coming undone…Click here for full article.