Credit rating firm warning on housing market
Credit rating firm Moody’s says that Canada’s economy is in good shape; with a stable banking system and a near-balanced budget; but there is concern over the housing market. The annual report supports Canada’s AAA rating but warns that the housing market presents a potential risk to the banks; and to the government finances due to the CMHC. Steven Hess who authored Moody’s report says the housing market is “particularly inflated” and represents the “largest downside risk” in the report. He also believes that with some slowdown in construction already being seen there are “no signs of a soft-landing”. Read the full story.
CMHC President: “The Canadian housing market is robust”
The president of the Canada Mortgage and Housing Corporation says that they are not alarmed by high prices and insists that the market is robust. Speaking yesterday Evan Siddall said that the agency is more concerned about levels of household debt and external pressures such as the global economy and the effect that could have on Canadian exports and employment. Responding to questions about the lack of data available Siddall said that CMHC is working to fill gaps in information and stated that transparency is important to the agency. He also confirmed that CMHC is continuing its “conversation” with the banking sector with the aim of it taking on more of the risk for home loans, reducing the federal agency’s exposure. Read the full story.
Calgary breaks annual MLS records
With more than two months still to go Calgary has broken one of its annual MLS sales records. According to Mike Fotiou of First Place Realty there had been 732 properties listed for $1 million or more in the year to October 18th; beating last year’s record of 726. Despite measures taken by the CMHC this year, including removing insurance for high-value properties where the buyer does not have a down payment of at least 20 per cent, there have been steady increases in luxury property sales this year. Read the full story.
Consumer sentiment trends lower again
The latest Bloomberg Nanos Canadian Confidence Index shows that consumers are less confident in the economy last week than they were the week before. The index of those who believe there will be improvement in the economy in the next 6 months was at its lowest mark since April 2013. In the real estate sub-index there has also been a drop in the past week with those believing that prices will increase in the next 6 months dipping below the year’s average. Read the full story.
Non-residential construction investment increases
New quarterly figures form Statistics Canada show that investment in non-residential building construction increased 1.2 per cent to $13.1 billion in the third quarter. This was the second consecutive quarterly increase and largely resulted from higher spending for commercial building construction. The largest gains were in Alberta and Ontario. All four of the Atlantic provinces and Quebec posted declines.