Canadian housing mania is consuming more and more of the country’s capital. The country is now devoting a record share of gross fixed capital to build homes. It’s really hard to appreciate this number without looking at the rest of the world. The share of investment devoted to homebuilding makes the US bubble look like […]
Inflation is transitory… or it may not be. It depends on whether the data is considered reliable enough that day. Bank of Canada (BoC) released a home price exuberance model, showing the market bubbles. Even more interesting is a footnote for the model they used. They feel inflation data on rent is unreliable, because it […]
The Canadian property bubble is at the part where some people now only see the expensive real estate that can be used for housing. One of Canada’s national newspapers recently ran a staff-written piece on why public parks are a waste of space. Instead, they suggest parks should be used for more housing or run […]
Low interest rates help to bring working and middle-class prosperity. Inequality will drop if only people could borrow more years of their income today. At least that’s the narrative society was sold on for the past 100 years. It turns out there’s no evidence to show that’s true. In fact, the evidence indicates it was […]
One Canadian bank doesn’t see home prices coming down anytime soon. Scotiabank shared their latest risk forecast in their Q2 2021 earnings. As of April 30, 2021, the bank sees a better outlook than they did in January. Home price growth is forecast to accelerate in the base and best case scenarios. As for the […]
Running out of land is as Canadian as hockey, maple syrup, or laundering money for global crime networks. In fact, Canadians love running out of land so much, they do it every few years. Many are currently justifying high home prices by claiming a lack of land in Canada. This isn’t just something people have […]
Canada’s largest bank still sees home prices making a steep drop in a worst-case scenario. RBC regulatory filings for Q2 2021 show the bank’s forecast for risk planning. Currently, they see price growth slowing from current levels, but still advancing. If housing surprises to the upside, they see home prices advancing a little more quickly. […]
One of Canada’s largest banks totally thinks your home is worth the appraisal. They’re just going to double-check your income though, uh… for a totally unrelated reason. Home equity levels may be exaggerated, said BMO chief risk officer Patrick Cronin. On the bank’s Q2 2021 earnings call, the executive explained the bank is putting a […]
Canadian real estate’s high flying prices are increasing the risk of a large correction. BMO Q2 2021 disclosures show the bank made big revisions to its risk forecast. In the best-case scenario, they see exuberance pushing prices more than twice as high as previously thought. In the worst case, they’ve more than doubled the size […]
Canadian real estate prices may be hitting peak growth soon… if a leading indicator continues to hold true. The sales to new listings ratio (SNLR) finally peaked at an absurdly high level, and has since made a sharp drop. The ratio, used as a measure of inventory absorption, has a track record of leading price […]
