Time for your weekly cheat sheet on this week’s most important stories.
Canadian Real Estate
Real Canadian Mortgage Credit Growth Is Pointing To An Early 80s Style Meltdown
Canadian real estate sales are dropping, and taking credit growth with it. The growth of mortgage credit fell to 3.38% in September, compared to last year. The number is down 38.76% from compared to growth seen last year, but wait – it gets worse.
When adjusted for inflation, we see a unique trend for Canadian mortgage growth. Real mortgage credit growth over that period is only 1.14% annually, 70.76% lower than last year. The rate is falling at nearly twice the rate expected by most. Even more concerning is we’ve only seen it fall this low two other times in Canadian history.
Canadian Real Estate Sales Drop 3%, Vancouver Over 10x Worse
Canadian real estate sales are declining, driven by soft demand in British Columbia. CREA reported 39,313 sales in October, down 3.39% compared to the same month last year. The problem in BC is getting interesting. Only one of the real estate boards in the province reported higher sales than last year.
Teranet: Canadian Real Estate Prices Made An Unusual Drop In October\
Canadian real estate prices made an unusual move last month. The C11, an index of real estate prices in Canada’s largest cities, fell 0.38% in October. Prices are still up 2.81% from last year, so it wasn’t all that bad. However, the index producers did make some few notes on why it’s not all good either.
A monthly decline in October is rare, only having occurred 4 times in 20 years. The decline was also the first in 8 months, and the annual decrease was due to last year’s numbers. Last year prices dipped abruptly, and they only slipped gently this year. We may have seen acceleration, but it won’t mean all that much until we can compare it to more stable time frames. Falling not as fast as last year is less than ideal.
Canadian Real Estate Developers Are Ramping Up Mainland Chinese Marketing
Canadian real estate developers are dependent on foreign buyers, and they want more. The Juwai developer survey found that 90% of developers sell one in ten homes overseas. They also found that 40% of Canadian developers plan to increase their overseas marketing budget. Nearly half will also maintain their existing budget going forward. This comes as domestic demand for new homes in Toronto and Vancouver continues to slide.
Toronto Real Estate
Toronto Detached Real Estate Sales Rise, But Still Below The 10 Year Trend
Toronto detached real estate prices are stalled, but sales are higher than last year. TREB reported a benchmark detached home cost $914,500 in October, down 0.73% from last year. The board also reported detached sales reached 3,328 sales in October, up 7.1% from last year. That’s huge growth, if you don’t remember that we’re comparing it to near historic lows hit last year. Sales were still 25% below 2016’s number, and 8.25% below the 10 year average. Jeez, context ruins everything.
Vancouver Real Estate
Vancouver Detached Real Estate Sales Fall Over 32%, Price Declines Get Larger
Vancouver detached real estate prices are moving lower, as sales drop off a cliff. REBGV reported a benchmark price of $1,524,000 in October, down 5.1% from last year. Sales fell to 634 in October, down a 32.11% from last year. This number could get worse, as inventory levels continue to build.
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