The chief economist of one of Canada\u2019s biggest banks is taking aim at reports of a possible Canadian housing market slowdown.<\/p>\n
\u201cAll we will say is that the slowdown is keeping itself very well disguised,\u201d quips Douglas Porter, BMO\u2019s chief economist, in a research note published this morning.<\/p>\n
Titled \u201cCanadian Housing Slowdown??? Don\u2019t think so\u2026\u201d, the note references articles published this week that highlight a recent cooling of Toronto and Vancouver home sales and tightening conditions that limit sales activity in the two cities.<\/p>\n
However, addressing items like these, Porter, the BMO economist, counters with the latest data from the Canadian Real Estate Association.<\/p>\n
\u201cTo recap, national home sales hit an all-time high in April in seasonally adjusted terms,\u201d he writes. Unadjusted sales make for the second-busiest sales month of all time, outpaced only by May 2007, Porter notes.<\/p>\n
A number of outlets from CTV News and the Globe and Mail to BuzzBuzzHome News recently picked up on a TD report, \u201cMoving On The Monopoly Board: Buyer Gridlock In The Toronto And Vancouver Housing Markets.\u201d<\/p>\n
The report outlines a scenario in which high prices in Toronto and Vancouver stop current homeowners from trading up, which chips away at the number of starter homes available to first-time buyers.<\/p>\n
\u201cThis reduces churn in the market, elevating prices and scaling back the selection of choices,\u201d writes TD economist Beata Caranci in that report. One could argue this weighs on sales activity.<\/p>\n
That same day, the Financial Post ran with an article headlined \u201cAfter long boom, Canada\u2019s housing shows some signs of cooling as high prices create \u2018a vicious circle.\u2019\u201d<\/p>\n
It didn\u2019t directly reference TD\u2019s report, but instead it quoted Jason Mercer, Toronto Real Estate Board\u2019s market analysis director, who noted the same issue in different terms.<\/p>\n
\u201cIt\u2019s a vicious circle,\u201d he tells the Financial Post. \u201cAs people consider selling, it might be very difficult to find a home to meet their needs,\u201d Mercer adds.<\/p>\n
But as Porter notes, sales activity continues to reach new heights. \u201cThe past year has seen 525,000 sales, the most ever,\u201d says Porter, mentioning double-digit year-over-year nationwide sales growth. \u201cThat\u2019s even before bringing prices into the equation.\u201d<\/p>\n
The average sale price of a home in Canada was up 13.1 per cent in April, compared to the same month last year.<\/p>\n
\u201cIf that\u2019s what passes for a slower market, or gridlock, or whatever one wants to call it, it\u2019s frightening to imagine what fast-moving traffic would look like,\u201d he concludes.<\/p>\n
Canadian Housing Market Slowing Down? \u201cDon\u2019t Think So,\u201d Says BMO Economist<\/a> by