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November 27, 2016 | The Locals

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.


If you have a house to sell in Cambridge, you win. Ask whatever the hell you want. But if you’re selling in Thompson, Manitoba, fail. Your chances of not finding a buyer quick are almost 90%. So start chopping the price.

As this pathetic blog has oft repeated, all real estate is local. These days among the marquee markets, Vancouver is in correction with dismal sales, the GTA is hot with demand exceeding supply, Calgary’s massively confused, Victoria is awash in YVR refugees while SW Ontario and Niagara accept Toronto’s rejects, and most other places (from Halifax to Montreal, Winnipeg to Edmonton) are in various stages of morbidity.

A measure of market vitality is the sales-to-listings ratio, which most local real estate boards published monthly. This tells you about absorption – how many available units are sold in a given period, expressed as a ratio of the number of listings that appeared in the same market during that time. When the ratio is between 40 and 60, the market is considered ‘balanced’. Above 60 and the sellers are in charge, which means prices are generally rising. Below 40, the opposite – sellers are tormented, buyers are in control and price movements will likely be lower.

It might surprise everybody in BC, where they think only special people live, that this autumn every one of top 10 cities (with the highest sales-to-listings ratios) were in Ontario. And all ten of the worst markets were in the West. As mentioned above, the best was sleepy Cambridge, where houses costing around $400,000 are starting to attract serious attention from GTA buyers 90 minutes down the 401. By the way, the average detached house in 905, that soulless horse collar surrounding Toronto, now costs more than $950,000.

Industry publication BuzzBuzzNews tapped into the following stats, gathered by CREA. You will notice that almost all of the dogs run in the prairies.

Top sellers’ Markets (by Sales-to-Listings Ratios):

1. Cambridge (103)
2. Guelph (93)
3. Woodstock-Ingersoll (92)
4. Northumberland Hills (89)
5. Kitchener-Waterloo (89)
6. Kawarthas (86)
7. Oakville-Milton (85)
8. Hamilton-Burlington (85)
9. Niagara (84)
10. Welland (83)

Top Buyers’ Markets (please pray for the sellers):

1. Thomson (12)
2. SE Saskatchewan (23)
3. Battlefords (26)
4. Fort Mac (29)
5. Yorkton (30)
6. Grande Prairie (30)
7. NE Alberta (31)
8. S Central Alberta (33)
9. Lloydminster (34)
10. Peace River (36)

By the way, the ratio for Toronto (GTA) last month was 72.5. The ratio in Vancouver in October was just 24.4. Ouch. But because everything in YVR is weird, this is what the local board says of that number: “Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.” Go figure.

Meanwhile there are lots of people who would like to piddle in the GTA’s wine glass during the current boom. Toronto city council will be dealing with a few motions in the coming days which will impact house prices, one of them being a suggestion that Vancouver’s ridiculous vacant-house tax (1% of assessed value annually) be aped in the Big Smoke. At the same time, Ontario has increased the land transfer tax grab on properties changing hands for $2 million or more (try finding even a semi-detached house midtown for less than that), and there is still considerable pressure for a Chinese Dudes levy, also copying the BC tax that finally brought Van back to earth.

A big proponent: BeeMo’s chief economist. Doug Porter.

“I do believe that it is foreign investment that’s really driven prices into the stratosphere, and I do believe it’s a provincial and municipal matter to basically try to offset some of that strength’” he says. “BC attacked it head on. We’ll wait to see how successful it is and whether it does what they wanted it to do. I think Ontario will one day wish they did it.”

Maybe Ontario will wish it didn’t try to engineer the market by doubling the transfer tax break for moisters at exactly the same time the feds were attempting to soft-land this gasbag with a new mortgage stress test. Perhaps BC will feel the same. All across Canada, governments have diddled massively with the housing market, sending out conflicting messages, helping inflate household debt and ensuring millions of families will be negatively impacted when the inevitable occurs.

Rest assured, by then the Chinese dudes’ll be long gone, debt and disappointment in their wake. Just ask around in Saskatchewan.

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November 27th, 2016

Posted In: The Greater Fool

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