{"id":6757,"date":"2017-08-21T10:10:30","date_gmt":"2017-08-21T17:10:30","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=6757"},"modified":"2017-08-20T16:34:33","modified_gmt":"2017-08-20T23:34:33","slug":"canadas-housing-bubble-has-vanished-without-a-crash-landing","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/","title":{"rendered":"Canada&#8217;s Housing Bubble Has Vanished Without A &#8220;Crash Landing&#8221;"},"content":{"rendered":"<p style=\"text-align: justify;\">Don\u2019t count on the Bank of Canada to change its course of gradually higher interest rates because the housing market is weakening. After all, that\u2019s what policy changes, particularly in British Columbia and Ontario, were put in place to do.<\/p>\n<p style=\"text-align: justify;\">The Canadian housing bubble \u2014 long feared to be vulnerable to a dangerous pop \u2014 is no more.<\/p>\n<p style=\"text-align: justify;\">\u201cIt has ceased. It has expired and gone to meet its maker,\u201d said Douglas Porter, chief economist at BMO Capital Markets, parroting a famous Monty Python quote. \u201cThis is a late bubble. Bereft of life, it rests in peace.\u201d<\/p>\n<p style=\"text-align: justify;\">Canada\u2019s housing market corrected for a fourth consecutive month in July, led by the cooling in Ontario. Yet the declines appear to be moderating, as the 2.1% monthly drop in nationwide home resales marked a significant moderation from the 6.4-per-cent average rate of decline in the previous two months.<\/p>\n<p style=\"text-align: justify;\">\u201cHousing market developments in July are consistent with our view that Canada\u2019s market is in the process of moderating to a more sustainable level of activity,\u201d said Robert Hogue, senior economist at RBC Capital Markets.<\/p>\n<p style=\"text-align: justify;\">\u201cMuch of the ongoing cooling is taking place in Ontario where recent policy changes by the provincial government have contributed to a welcome shift in market psychology toward more caution.\u201d<\/p>\n<p style=\"text-align: justify;\">Hogue acknowledged that the dramatic drop in Greater Toronto Area home resale activity during the past four months doesn\u2019t look like a soft landing, as the 44% (seasonally adjusted) dip since March is not far from the 48% plunge seen between December 2007 and December 2008.<\/p>\n<p style=\"text-align: justify;\">However, the economist doesn\u2019t think a \u201ccrash landing\u201d is playing out. Instead, he believes the GTA\u2019s market correction is now overshooting.<\/p>\n<p style=\"text-align: justify;\">Meanwhile, data for July provides more evidence that the Vancouver-area housing market isn\u2019t overheating again.<\/p>\n<p style=\"text-align: justify;\">Hogue pointed to the third consecutive monthly decline (1.7%) of home resales, along with a dip in the sales-to-new listings ratio for four of the past five months.<\/p>\n<p style=\"text-align: justify;\">\u201c\u2026 We expect any further increase to be modest in the short term as the market stays close to balanced conditions,\u201d Hogue said.<\/p>\n<p style=\"text-align: justify;\">As more stringent mortgage regulations and rising mortgage rates hold back demand across much of Canada, there is little reason to think the country\u2019s central bank is all that worried.<\/p>\n<p style=\"text-align: justify;\">TD Bank economist Diana Petramala expects the Bank of Canada to hike rates three times in the next 18 months, so mortgage rates should continue to trend higher.<\/p>\n<p style=\"text-align: justify;\">\u201cAs such, housing affordability is likely to deteriorate broadly across Canada,\u201d she said, adding there are few signs that foreign investment or speculation has shifted to areas outside of Ontario after the implementation of a non-resident buyer\u2019s tax in the province.<\/p>\n<p style=\"text-align: justify;\">Despite the GTA\u2019s supply increase that has caused a sharp market rebalancing, Petramala expects the market will undergo a soft landing.<\/p>\n<p style=\"text-align: justify;\">The economist believes GTA home prices could fall about 6% on an annual basis in 2018.<\/p>\n<p style=\"text-align: justify;\">In other markets, she anticipates price growth between 2 and 4%, which is below the six-per-cent average of the past 15 years, but consistent with income growth and rising mortgage rates.<\/p>\n<p style=\"text-align: justify;\">\n<p style=\"text-align: justify;\">David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates Inc., characterized the softening Canadian housing markets as \u201cvery orderly,\u201d despite his view that the \u201cbubble has been popped\u201d in Toronto and the surrounding area.<\/p>\n<p style=\"text-align: justify;\">He believes that if the GTA\u2019s declines match what occurred in Vancouver, the correction will probably last little more than a year, \u201cand prove to be a healthy environment (outside of those who bought at or close to the peak.\u201d<\/p>\n<p style=\"text-align: justify;\">Rosenberg also noted that sales activity is up in non-bubbly areas such as Ottawa, Quebec City, Winnipeg, Edmonton, Regina and Hamilton.<\/p>\n<p style=\"text-align: justify;\">As a result, he believes the suggestion that 20 per cent of the Canadian housing market will hurt the banks when the other 80% is in good shape is somewhat ridiculous.<\/p>\n<p style=\"text-align: justify;\">\u201cThe banks lend nationally, not regionally, and nationally what we have on our hands is a nearly perfectly balanced market,\u201d the economist said, pointing to the sales-to-new listing ratio of 53.5.<\/p>\n<p style=\"text-align: justify;\">The housing market slowdown will take a bite out of bank earnings, but Rosenberg is confident it is already priced into their stocks. He also sees no reason why this will turn into a credit event.<\/p>\n<p style=\"text-align: justify;\">\u201cThere\u2019s no canary in the coal mine here and this is not the same orbit as the US in 2006-07 when it was truly a national bubble,\u201d the economist added.<\/p>\n<p><a href=\"http:\/\/www.vancouversun.com\/canada+housing+bubble+ceased+without+crash+landing\/14216329\/story.html\" target=\"_blank\" rel=\"noopener\">Canada&#8217;s Housing Bubble Has Vanished Without A &#8220;Crash Landing&#8221;<\/a> by Jonathan Ratner | Financial Post | Vancouver Sun<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Don\u2019t count on the Bank of Canada to change its course of gradually higher interest rates because the housing market is weakening. After all, that\u2019s what policy changes, particularly in &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-6757","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canada&#039;s Housing Bubble Has Vanished Without A &quot;Crash Landing&quot; &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canada&#039;s Housing Bubble Has Vanished Without A &quot;Crash Landing&quot; &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Don\u2019t count on the Bank of Canada to change its course of gradually higher interest rates because the housing market is weakening. After all, that\u2019s what policy changes, particularly in &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"Canada&#8217;s Housing Bubble Has Vanished Without A &#8220;Crash Landing&#8221;\",\"datePublished\":\"2017-08-21T17:10:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/\"},\"wordCount\":757,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"articleSection\":[\"Market Updates\"],\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/\",\"name\":\"Canada's Housing Bubble Has Vanished Without A \\\"Crash Landing\\\" &#8226; Rory C Real Estate | Oakwyn Realty\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#website\"},\"datePublished\":\"2017-08-21T17:10:30+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/#breadcrumb\"},\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2017\\\/08\\\/canadas-housing-bubble-has-vanished-without-a-crash-landing\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Canada&#8217;s Housing Bubble Has Vanished Without A &#8220;Crash Landing&#8221;\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#website\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/\",\"name\":\"Rory C Real Estate | Oakwyn Realty\",\"description\":\"Rory C Real Estate Updates | Home Selling &amp; Buying\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-CA\"},{\"@type\":[\"Person\",\"Organization\"],\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\",\"name\":\"Rory Clipsham\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-CA\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\",\"contentUrl\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\",\"width\":504,\"height\":504,\"caption\":\"Rory Clipsham\"},\"logo\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/wp-content\\\/uploads\\\/2019\\\/10\\\/RoryC-white-w-tagline.jpg\"},\"sameAs\":[\"http:\\\/\\\/www.roryc.ca\\\/\",\"https:\\\/\\\/www.facebook.com\\\/pg\\\/BurnabyandCoquitlamHomes\\\/about\\\/?ref=page_internal\",\"https:\\\/\\\/www.instagram.com\\\/roryclipshamhomes\\\/\",\"https:\\\/\\\/x.com\\\/RoryClipsham\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Canada's Housing Bubble Has Vanished Without A \"Crash Landing\" &#8226; Rory C Real Estate | Oakwyn Realty","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/","twitter_card":"summary_large_image","twitter_title":"Canada's Housing Bubble Has Vanished Without A \"Crash Landing\" &#8226; Rory C Real Estate | Oakwyn Realty","twitter_description":"Don\u2019t count on the Bank of Canada to change its course of gradually higher interest rates because the housing market is weakening. After all, that\u2019s what policy changes, particularly in &hellip; [read more]","twitter_creator":"@RoryClipsham","twitter_site":"@RoryClipsham","twitter_misc":{"Written by":"Rory Clipsham","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/#article","isPartOf":{"@id":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/"},"author":{"name":"Rory Clipsham","@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7"},"headline":"Canada&#8217;s Housing Bubble Has Vanished Without A &#8220;Crash Landing&#8221;","datePublished":"2017-08-21T17:10:30+00:00","mainEntityOfPage":{"@id":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/"},"wordCount":757,"commentCount":0,"publisher":{"@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7"},"articleSection":["Market Updates"],"inLanguage":"en-CA","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/","url":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/","name":"Canada's Housing Bubble Has Vanished Without A \"Crash Landing\" &#8226; Rory C Real Estate | Oakwyn Realty","isPartOf":{"@id":"https:\/\/www.roryc.ca\/blog\/#website"},"datePublished":"2017-08-21T17:10:30+00:00","breadcrumb":{"@id":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/#breadcrumb"},"inLanguage":"en-CA","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.roryc.ca\/blog\/2017\/08\/canadas-housing-bubble-has-vanished-without-a-crash-landing\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.roryc.ca\/blog\/"},{"@type":"ListItem","position":2,"name":"Canada&#8217;s Housing Bubble Has Vanished Without A &#8220;Crash Landing&#8221;"}]},{"@type":"WebSite","@id":"https:\/\/www.roryc.ca\/blog\/#website","url":"https:\/\/www.roryc.ca\/blog\/","name":"Rory C Real Estate | Oakwyn Realty","description":"Rory C Real Estate Updates | Home Selling &amp; Buying","publisher":{"@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.roryc.ca\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-CA"},{"@type":["Person","Organization"],"@id":"https:\/\/www.roryc.ca\/blog\/#\/schema\/person\/0672b9777e67473b9bd9247df49499c7","name":"Rory Clipsham","image":{"@type":"ImageObject","inLanguage":"en-CA","@id":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg","url":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg","contentUrl":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg","width":504,"height":504,"caption":"Rory Clipsham"},"logo":{"@id":"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2019\/10\/RoryC-white-w-tagline.jpg"},"sameAs":["http:\/\/www.roryc.ca\/","https:\/\/www.facebook.com\/pg\/BurnabyandCoquitlamHomes\/about\/?ref=page_internal","https:\/\/www.instagram.com\/roryclipshamhomes\/","https:\/\/x.com\/RoryClipsham"]}]}},"_links":{"self":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts\/6757","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/comments?post=6757"}],"version-history":[{"count":1,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts\/6757\/revisions"}],"predecessor-version":[{"id":6758,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/posts\/6757\/revisions\/6758"}],"wp:attachment":[{"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/media?parent=6757"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/categories?post=6757"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roryc.ca\/blog\/wp-json\/wp\/v2\/tags?post=6757"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}