Canada goes YOY -ve

[TheCountOfNowhere]

http://www.huffingtonpost.ca/2017/08/15/canadas-average-house-price-drops-as-toronto-s-slump-spreads-ac_a_23078169/

 

For the first time in four-and-a-half years, the average house price in Canada is lower than it was a year earlier — a clear sign that tougher housing rules and rising mortgage rates are taking a bite out of the once-hot housing market.

[stuckmojo]

Has their bubble finally burst? 

[Sancho Panza]

4 minutes ago, stuckmojo said:

Has their bubble finally burst? 

Looks like a lot of marginal buyers are withdrawing from markets where Chinese buyers have been active.The Kiwi thread has some good anecdotes on.Be interesting to hear from any HPCers local to Canada.

[Sancho Panza]

20 minutes ago, TheCountOfNowhere said:

http://www.huffingtonpost.ca/2017/08/15/canadas-average-house-price-drops-as-toronto-s-slump-spreads-ac_a_23078169/

 

For the first time in four-and-a-half years, the average house price in Canada is lower than it was a year earlier — a clear sign that tougher housing rules and rising mortgage rates are taking a bite out of the once-hot housing market.

' Declining house prices in Toronto have now spread to cities across southern Ontario, with Hamilton, Kitchener-Waterloo, the Niagara region, London and Windsor all reporting price declines in July, according to data from the Canadian Real Estate Association (CREA). '

'Nationally, sales are down 11.9 per cent from a year ago, dragged down by an 8.8-per-cent sales decline in Vancouver and a 40.7-per-cent decline in Greater Toronto.

In Toronto, the average price of $746,218 is still 5 per cent higher than a year ago. But it has fallen by about 19 per cent since April, when Ontario's government announced a slate of new measures to cool the housing market.

Those measures included a 15-per-cent foreign speculator's tax and an expansion of rent controls in the Greater Golden Horseshoe Area, which includes Greater Toronto, Hamilton-Burlington and some surrounding areas.'

 

 

Ouch!.......The problem some of the bulls have is that they view demand as a constant that revolves around ability to pay.Like any market,once prices start dipping,people hold off purchases which .........causes prices to drop some more.

 

I've felt for a while,that the thing that initates this deflationary collapse will be the drop off in demand on the long side rather than interest rate rises.The old playbooks need chucking out the window.This time it's different.

 

 

[TheCountOfNowhere]

8 minutes ago, Sancho Panza said:

' Declining house prices in Toronto have now spread to cities across southern Ontario, with Hamilton, Kitchener-Waterloo, the Niagara region

 

 

Sounds oh so familiar....

[TheCountOfNowhere]

9 minutes ago, Sancho Panza said:

Those measures included a 15-per-cent foreign speculator's tax and an expansion of rent controls in the Greater Golden Horseshoe Area, which includes Greater Toronto, Hamilton-Burlington and some surrounding areas.'

 

 

 

 

 

I am NOT holding my breath waiting on Westminster dong this for the good of the British people......

[Freki]

When is it our turn?

[darkmarket]

2 hours ago, Sancho Panza said:

But it has fallen by about 19 per cent since April, when Ontario's government announced a slate of new measures to cool the housing market.

There's still some concern that Toronto could recover in the manner of Vancouver, which is back to new peaks of insanity already.

[AdamoMucci]

1 minute ago, darkmarket said:

There's still some concern that Toronto could recover in the manner of Vancouver, which is back to new peaks of insanity already.

I think this should still be a concern everywhere. I am still not convinced we are seeing even the beginnings of a return to sanity.

[darkmarket]

1 minute ago, AdamoMucci said:

I think this should still be a concern everywhere. I am still not convinced we are seeing even the beginnings of a return to sanity.

The problem is prices are at a point where a dangerously high percentage of new mortgages are necessarily junk, and attempts to cool the market without crashing it would allow the proportion of junk to increase rapidly. Canada also has an associated systemic threat from HELOCs. They have no choice now, but I wouldn't expect sanity from Canadian buyers in 2017.

[TheCountOfNowhere]

32 minutes ago, Foreverblowingbubbles said:

Whoa there! I'm not sure I understood your point, but are you saying bankers - i guess inferring Jews -  were the cause of world war 2?

That's some leap you made there dude, are you Jewish per chance?

 

 

No, I'm saying when a financial system becomes so corrupt and collapses the people will turn on the people they see as responsible.  

In the case of the UK that could be the bankers, the politicians or the immigrants.

I can see exactly why this happened, I can see why people followed that small Austrian man.

Religion, now there's a thing, you show me your god and I'll believe in religion, until then I'll just assume it's a state propaganda tool used to control the masses for centurys, now replaced by TV.

All hail the holy X-factor.

Edited August 16, 2017 by TheCountOfNowhere

[jfk]

All bubbles must ... deflate ... 

[TheCountOfNowhere]

26 minutes ago, honkydonkey said:

Try thinking before engaging brain and throwing around nasty accusations so casually.

I'm hoping he'll get to read my full reply.

What a d*ck.

[Sancho Panza]

2 hours ago, darkmarket said:

The problem is prices are at a point where a dangerously high percentage of new mortgages are necessarily junk, and attempts to cool the market without crashing it would allow the proportion of junk to increase rapidly. Canada also has an associated systemic threat from HELOCs. They have no choice now, but I wouldn't expect sanity from Canadian buyers in 2017.

Boom!

In terms of owner occupiers stepping in you're absolutely on the money.Lending at these multiples of salary is inherently a lot riskier than credit markets are indicating.

Dow theory-which has stood me in good stead over the years- states you should be wary of the price action either way on low vol.Having said that low vol at high prices is another type of warning in itself.

 

Edited August 16, 2017 by Sancho Panza

[darkmarket]

20 minutes ago, Sancho Panza said:

Dow theory-which has stood me in good stead over the years- states you should be wary of the price action either way on low vol.Having said that low vol at high prices is another type of warning in itself.

I think Dow theory is still in most people's toolkits to make sense of these moves, although the manipulation is unprecedented. We know volumes in the actual housing market are low, but I'm curious as to what's happening in the derivatives markets at the moment. It didn't take a huge proportion of junk in the US market to create the 2007 crash, it's a question of who'll do what BNP Paribas did last time, break ranks and show their hand. And in the meantime, prices are falling 5% per month.

[Sancho Panza]

3 minutes ago, darkmarket said:

I think Dow theory is still in most people's toolkits to make sense of these moves, although the manipulation is unprecedented. We know volumes in the actual housing market are low, but I'm curious as to what's happening in the derivatives markets at the moment. It didn't take a huge proportion of junk in the US market to create the 2007 crash, it's a question of who'll do what BNP Paribas did last time, break ranks and show their hand. And in the meantime, prices are falling 5% per month.

Yeah,it's use in stock markets has been increasingly restricted by HFT and algos.

However,where there's transactional transparency,then I think it's central tenets can be applied.

The one thing we've forgotten-and maybe that's due in stock markets to the issues mentioned above- is the importance of the marginal buyer in directing the price action.As you allude,it only took a small drop in demand in 2007/8 to see prices crash and it didn't take much of a price drop to smother derivatives activity (unless you were selling your dross to the fed).

Rising IR's may not be relevant to this downturn as we know that CB's and Govts will step in to backstop insolvent banks.Rather that it will be structural weakness on the long side caused by

1) falling prices leading to delays in purchases

2) falling confidence in long term asset values due to 1)

3) real wages declining particularly with reference to the price of non core items such as food and fuel

4) real wages declining due to immigration,particularly semi skilled and low skilled.

5) declining investment by BTLers due to tax changes and 1)

Interesting times.

[msi]

Carney leaves and this happens.....hint?

[darkmarket]

It's reasonably safe to say the asset bubbles in equities and property are based on the same impulses. In the stock markets, the marginal buyer is often the corporation itself using low-cost credit, so effectively the central bank. Algos and funds will follow them as long as wider conditions make it possible. In the housing market, the marginal buyer's decision is largely determined by monthly repayments at the outset of the mortgage, reflecting low-cost credit again. Distressed asset funds are increasingly active as the market is propped up.

Such is the state of capitalism. I'd agree that rising IRs aren't necessary to create the loss in confidence that's sufficient for a crash, and your list looks dead on the mark, all exacerbated by central banks having nothing left to offer. This is happening now in Toronto, Auckland, London, NYC, there isn't much to do but wait for the inevitable to unfold.

[Sancho Panza]

10 minutes ago, darkmarket said:

It's reasonably safe to say the asset bubbles in equities and property are based on the same impulses. In the stock markets, the marginal buyer is often the corporation itself using low-cost credit, so effectively the central bank. Algos and funds will follow them as long as wider conditions make it possible. In the housing market, the marginal buyer's decision is largely determined by monthly repayments at the outset of the mortgage, reflecting low-cost credit again. Distressed asset funds are increasingly active as the market is propped up.

Such is the state of capitalism. I'd agree that rising IRs aren't necessary to create the loss in confidence that's sufficient for a crash, and your list looks dead on the mark, all exacerbated by central banks having nothing left to offer. This is happening now in Toronto, Auckland, London, NYC, there isn't much to do but wait for the inevitable to unfold.

It's funny you should say that,I was having a chat with a perma bull I know the other day and he actually volunteered that markets were moving up on the buy backs being the main cause of increasing earnings particualrly in the US.

I take that as a sign.This is a broker who steered himself into tech stocks all the way up to the collapse in 2000/1 and all the way on the downside.I suppose you have to be a Bull in that game but when someone like him is talking down earnings growth,there's a problem.

Algos and HFT have created a massive structural weakness in stock markets in that they totally distort volume and by implication,amplify the price action.

In terms of CB's,as you say,they've boxed themselves into a corner.The BoJ owns something like 40% of the market in JGB's.The SCB owns a chunk of Apple........and has $80bn in the US stock market.Where will it all end?

 

[darkmarket]

12 minutes ago, Sancho Panza said:

It's funny you should say that,I was having a chat with a perma bull I know the other day and he actually volunteered that markets were moving up on the buy backs being the main cause of increasing earnings particualrly in the US.

I take that as a sign.

It's like there's no shame admitting it any more.

13 minutes ago, Sancho Panza said:

Where will it all end?

The IMF.

[Foreverblowingbubbles]

9 hours ago, TheCountOfNowhere said:

That's some leap you made there dude, are you Jewish per chance?

 

 

No, I'm saying when a financial system becomes so corrupt and collapses the people will turn on the people they see as responsible.  

In the case of the UK that could be the bankers, the politicians or the immigrants.

I can see exactly why this happened, I can see why people followed that small Austrian man.

Religion, now there's a thing, you show me your god and I'll believe in religion, until then I'll just assume it's a state propaganda tool used to control the masses for centurys, now replaced by TV.

All hail the holy X-factor.

Apologies, it seemed to be the leap was clear in what I read, but I did question my own understanding of what you'd said, and ask for clarification. 

No, I am not Jewish, not that it's really relevant. 

Apologies for taking the thread off topic and that I misinterpreted your point, I agree with your point above, about people turning on those who cause the system the collapse.