- the source for market opinions


August 4, 2017 | Not Yet

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.


Well, you know where things are headed when even the realtors are dissing the market. “Just , a little update for you,” says agent Uri Kogan who works a rich little turf in north TO. “Since the last email I sent you 0 houses have sold in this hood. And listings went down, from 76 to 66 – as houses are coming off the market.”

In other words, we have gone from 13 sales a week in May to none. In fact in all of July only six houses traded – in an area where a year ago there were multiple offers and homes selling for hundreds of thousands over asking. Now disparaged sellers are yanking their properties back, thinking everything will return to delusional normal after Labour Day.

But it won’t. This is terminal. The move-up real estate market has croaked.

And here’s the latest from blog pal Hanny Elsaed, whose site  tracks this bloodletting with morbid fascination, but sadly no dog pictures. This is a quick summary of what’s happening these days in the core and the hinterland – where FOMO forced prices into extremes. No more.

Richmond Hill
Detached home sales are down 72.4% while listings have grown by 103.9% year/year. The average price of $1.439 million plunged 14% in July.

Detached sales are lower by 51.8% and listings have increased by 121%. The average price of $1.273 million fell 4.5% last month.

A surprise here – sales are lower by 39% and listings have swollen by 104% compared with last year, but the average price of $1.113 million was up 4% in July.

No such luck in this massive community to the north. Sales were off 49% in July while there are 136% more houses for sale. The average price of $750,856 dropped 6.3% in 30 days.

Sales crashed 54.4% while the number of available homes is up 88% from last year. The average price of $875,123 took a nosedive in July, down a stunning 9.4%.

To the east of the 416 Holy Land sales last month fell 44.5% and there are an unbelievable 229.6% more houses being flogged. The average price fell 9.8% last month alone, from over $752,000 to under $680,000.

In the urban area, the market is not immune. Detached sales were lower last month by 41.7% and listings increased 96%. But the average price bounced 8%, from $1.202 million to $1.3 million.

Toronto condos
There were 28% fewer deals last month, and listings have declined a substantial 18%. But prices appear to have peaked and started to descend – down 3.7% in July.

Meanwhile in what is arguably the most expensive neighbourhood in Canada – the Westside of Vancouver – agent Stuart Bonner reports this: “Detached home sales were down 31% in July to 74 from 108 in July 2016. Of those sales, 18 received the asking price or more and 56 sold below the asking price. July 2017 supply increased 24% to 731 homes from 588 in July 2016.”

Comments area resident and blog dog Linda: “Looks pretty shitty.  Almost 10 months of inventory… I think it’s shocking that anything’s selling at all, but 74 sales is pretty much nothing compared with total inventory of 731.   Noting that 731 is the highest inventory of any month in the last two years.

Of course there’s more to worry about. It appears a second Bank of Canada rate hike (maybe even two) is looming over the next few months. The latest job stats show recent gains have held and we now have the lowest unemployment level since the autumn of 2008 – when this pathetic blog was still crawling around in Huggies still looking cute. It’s all the confirmation the bankers need to carry on ‘normalizing’ rates which inflated the mama of all housing gasbags. And, as far as we know, banks are still getting ready to stress test every single borrower later this year at the going rate plus 2%. Combine all this with plunging appraisal values and as realtor John Pasalis said this week, “there’s no good news here.”

Okay, so it sucks to be a seller. And it’s too early to joyously vultch.

But the real question is, what are they saying about this blog in Germany? Porsche salesguy Johnny just sent me this newspaper article. I note it calls me an “Investmentberater.” Jeez. Sounds bad.

Preise stürzen 40 Prozent ab: Platzt die nächste Immobilienblase in Kanada?

dpa/Peer Grimm (Archiv) In Toronto platzt die Immobilienblase: Im Juli fielen die Verkäufe von Wohnobjekten in der Metropolregion verglichen mit dem Vorjahreszeitraum um 40 Prozent

Während die USA noch immer unter den Folgen des Häusermarkt-Kollapses von 2007 leiden, ging der Immobilien-Boom in Kanada in den letzten zehn Jahren munter weiter. Nun könnte eine teure Quittung kommen.

Vor zehn Jahren begann die Kreditpyramide, auf der der US-Immobilienmarkt stand, wie ein Kartenhaus in sich zusammenzufallen. Der Crash stürzte die Weltwirtschaft in die tiefste Krise seit der großen Depression der 1930er Jahre. Um den völligen Kollaps des Finanzsystems zu verhindern, wurden Banken mit Hunderten Milliarden an Steuergeld gerettet. Während sich der US-Markt nach dem Schock deutlich abkühlte, stiegen die Häuserpreise im Nachbarland Kanada einfach weiter. Nun droht auch hier eine hohe Rechnung.

In der boomenden Großstadt Toronto platzt die Immobilienblase gerade. Im Juli fielen die Verkäufe von Wohnobjekten in der Metropolregion verglichen mit dem Vorjahreszeitraum um enorme 40 Prozent, wie Daten des lokalen Branchenverbands TREB zeigen. „Es handelt sich um einen der rasantesten Markteinbrüche der Geschichte – wann der Boden erreicht sein wird, ist noch nicht abzusehen“, warnt der kanadische Finanzexperte und Investmentberater Garth Turner.

„Käufer reagieren nicht einmal auf unsere Anwälte“
In seinem Blog beschreibt Turner den Niedergang lebhaft mit Beispielen aus Torontos Immobilienszene. „Der Mist nimmt kein Ende. Die Käufer reagieren nicht einmal auf unsere Anwälte“, klagt dort ein Hausbesitzer. Er hatte seine Immobilie für 2,25 Millionen kanadische Dollar verkauft, doch dann bekamen die Vertragspartner im allgemeinen Abwärtsstrudel kalte Füße. Das Objekt musste neu inseriert werden, der Wert schrumpfte innerhalb von drei Monaten um fast ein Viertel.

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the Weekly Recap.

August 4th, 2017

Posted In: The Greater Fool

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site


This site uses Akismet to reduce spam. Learn how your comment data is processed.