Daily Market Update

by Jordan Maxwell23 Mar 2015
Author: Household debt levels 'concerning'
Canada emerged from the U.S.-led real-estate crash of 2008 largely unscathed, but there are ‘concerning’ signs the country’s economy could be on a worrying path of its own, says the author of “Boombustology” in this Bloomberg Surveillance clip. According to the article in the Financial Post, the author revealed that, “Credit and debt has been rising very rapidly, so the absolute level of household debt is concerning,” Vikram Mansharamani says on the show, noting house prices that collateralize much of that debt have also risen at a fast clip in recent years. Vancouver, for instance, was recently ranked the second-least affordable housing market in the world, he says. What makes these trends all the more concerning right now is the potential economic repercussions of collapsing oil prices and the emergence of a private mortgage market, Mansharamani explains. The author joins a pool of analysts who've expressed doubt in the short term but most, especially, realtors remain optimistic about market trends and the housing market in Canada. See the author's comments here.

CMHC: Edmonton housing starts up, Calgary down
The story of new home starts across Alberta in February is the tale of its two largest cities, with the narration much different in each, according to an article in the Calgary Sun. A new monthly report from Canada Mortgage and Housing Corp. (CMHC), show that new home starts in the Calgary census metropolitan area (CMA) were trending to reach 13,098 units by the end of the year, a decline from the January trend of 14,697 starts. “The trend in total housing starts in Calgary moved lower in February for the third consecutive month,” said Felicia Mutheardy, CMHC’s senior market analyst in Calgary. “The overall decline was mostly attributed to fewer apartment starts." In the Edmonton CMA, starts were trending at 18,350 units in February, up from 16,706 in January. “The trend in housing starts moved higher in February largely due to a stronger pace of production in the multi-family sector. For the second consecutive month, higher apartment starts led the way for multi-family construction,” said Christina Butchart, CMHC’s senior market analyst for Edmonton. According to analysts however, it doesn’t necessarily mean there is a greater demand for apartments in Edmonton than in Calgary, but more likely that the home of the Oilers is catching up to the home of the Flames (well, in apartment starts anyway). To the end of last month, there were 8,586 apartments under construction in the Calgary CMA and 8,459 being built in the Edmonton CMA.
Realnet: Price gap between condos, houses in Toronto jump
In a possible sign of things to come as Toronto’s spring housing market heats up, the gap between the price of a new house and a new condo skyrocketed to nearly $300,000 in February, according to stats from RealNet Canada. It was a fresh record for a market where intense competition has pushed the average price of a detached house over $1-million, while a flood of newly built condos, many of them aimed at investors, has kept prices flat. The average price of a new house in the Greater Toronto Area hit $733,578 in February, up 12 per cent from a year earlier, data from real estate research firm RealNet Canada Inc. and the Building Industry and Land Development Association show. That figure includes the price of all low-rise housing: detached, semi-detached and townhouses. The average price of a new condo, meanwhile, has gained less than one per cent over the past year, rising to $442,672 in February. New condo prices have actually fallen slightly in the past two months. The growing disconnect between single-family and high-rise homes has pushed the price gap up nearly $40,000 since December, according to an article in the Globe and Mail. Anaylsts feel that given that the numbers capture only newly-built housing, the widening price gulf reflects the fact that the soaring cost of land in the Toronto area has shifted new single-family development toward higher-end homes, while pressure from investors to keep condo prices low has encouraged developers to shrink the size of units. 

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