Real Estate

The Canadian Real Estate PLUNGE-O-METER

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The Plunge-O-Meter tracks the dollar and percentage losses from the peak and projects when prices might find support. On the price chart in the spring of 2005 there was a 4-6 month plateau period while buyers and sellers twitched like a herd. When the credit spreads narrowed and the yield curve began its journey towards inversion, the commodity stampede began.
 
The Price Support target represents prices at March 2005; the start of a 40 month period of ardent speculation in all commodities; then a full blown crash into the pit of gloom (March 2009); and then another 39 month rocket ship to the moon but then the crowd suddenly thinned out in April 2012. The revival of spirits erupted in 2013 as global money went short cash and long real estate on an inflation bet (see Whale Watching). Now we have a major divergence with Vancouver and Toronto going against the trend.
 
…see the price trends of  6 Canadian Cities with more than a milion HERE

Compare Vancouver to Toronto SFD, Townhouse & Condo Housing Prices and Total Residential Listings & Sales and Absorption Rates

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The chart above shows the average Single Family Dwelling, Townhouse and Condo prices (solid plot lines) of both Vancouver and Toronto as well as the Monthly Absorption Rate (MAR = Sales/Listings as dotted plot lines). At the Vancouver peak in April 2012, Vancouver metro SFDs were an astounding 64% (1.6 times) more expensive than GTA comparables. But Toronto has been on a tear out of the March 2009 Pit of Gloom and the SFD price differential has shrunk to 33% (1.3x) even with the current (April 2015) peak average SFD price in Vancouver.

…..for larger chart & to read more go HERE

 

Negative Interest Rates Put World on Course for Biggest Mass Default in History

eurozone 3023810bMore than €2 trillion-worth of eurozone government bonds trade on a negative interest rate. It’s a bubble that is bound to end badly

Here’s an astonishing statistic; more than 30pc of all government debt in the eurozone – around €2 trillion of securities in total – is trading on a negative interest rate. 

With the advent of European Central Bank quantitative easing, what began four months ago when 10-year Swiss yields turned negative for the first time has snowballed into a veritable avalanche of negative rates across European government bond markets. In the hunt for apparently “safe assets”, investors have thrown caution to the wind, and collectively determined to pay governments for the privilege of lending to them.

….read more HERE

 

Yet Another Warning Over Canada’s Housing Market

images-1The Economist says that Canada’s housing market is overvalued by at least 25 per cent. More likely 35%

The magazine named Canada along with the U.K. and Australia as being “notable” for having an overvalued housing market. The metrics it uses include home-value-to-rent ratios and prices relative to after-tax income.

It’s not the first time that Canada has ranked highly in the Economist’s analysis of property markets, but it is the first time it’s been at the top.

House prices compared to rents are 89 per cent overvalued, which is a rise of 73 per cent from two years ago. Compared with income prices are 35 per cent too high. 

related:

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Shocking CDN Real Estate Chart Shows Sales Exhaustion

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As the chart above shows that overall Trans-Canada Single Family Housing Sales are exhausted. Amazingly within that sales exhaustion are continuing potent Bull Markets in Toronto and Vancouver.

In the interview below Brian Ripley is questioned about the 2 charts showing how SFD properties in the hot markets are defying the national residential real estate sales slowdown as well as the ballooning strata inventory levels in both listings for sale and properties for rent.

 

Jim Rogers Predicts HK Home Prices Down 50% Within 3 Years, Peg Abandoned

weJim Rogers notes increased housing supply will mark the peak of the housing market and a major price decline will unfold. 

According to Hong Kong, “Ming Pao Daily News” reported on the 12th, the well-known investor Jim Rogers (Jim Rogers), said recently that Hong Kong real estate bubble has to burst the edge of Hong Kong within three years house prices will fall by more than 50%.

Singapore and Hong Kong at the time of acceptance of Rogers’ Ming Pao Daily News “interview, said the Hong Kong real estate bubble has been in extreme, sharp correction is reasonable. A substantial increase in housing supply in Hong Kong “will be the decisive factor for the price.”

Official data show that the Hong Kong SAR Government, 2014 Hong Kong individual completions for 15,720 residential units, compared with 2013 units in 8250 nearly doubled. Property annual report this year, the Hong Kong SAR Government announced April 1 predicts the next two years the amount of new homes completed in Hong Kong will be more than 30,000 units, a record high since 2004.

In addition to excess supply, the Hong Kong Government may cancel HK dollar peg system, which will also impact prices in Hong Kong. Rogers has said publicly early in 2015, the Hong Kong Government has the opportunity to cancel the linked exchange rate system.