By John Geddes - Wednesday, January 23, 2013 - 0 Comments
Far be it from me to suggest that Mark Carney’s career trajectory and choices of vacation spots aren’t fascinating—and both topics got a decent share of attention at his news conference today—but the Bank of Canada governor’s latest message on the Canadian housing market strikes me as even more interesting.
Here at Maclean’s—as you might have noticed if you watch our cover stories, including this recent one—we are quite intrigued by the housing market. And I don’t think we’re alone, based on the evidence of the many dinner conversations I’ve heard turn, inexorably it seems, to real estate prices. Carney’s message today, as he discussed the bank’s quarterly monetary policy report, is that the heat is out of the market.
By Stephen Gordon - Monday, December 3, 2012 at 12:36 PM - 0 Comments
One of the more worrying aspects of population aging is its effect on the prices of assets that many people are counting on to support them in retirement. For example, many Canadians may be planning to sell their house when they retire, buy a less-expensive condo and deposit the difference. The problem is that if a large wave of people retire and execute this strategy at the same time, the flood of new supply on the housing market will depress prices, thus reducing the value of the housing assets that were supposed to finance their retirements.
The run-up in housing prices over the past decade has attracted a lot of attention in this regard and led to worries that Canadian households’ balance sheets might be over-weighted on housing. But it turns out that much of the surge in the 2000s can be seen as a recovery from what was a very dismal market in the 1990s (see also this WCI post). Housing’s share of household assets did increase sharply during the 2000s, but this ratio still hasn’t recovered pre-1990 levels and remains below what it was in the 1970s. (Data are taken from Cansim Table 378-0051.)
By Colby Cosh - Friday, March 2, 2012 at 4:14 AM - 0 Comments
Here’s a blog post that is going to be worth exactly what you paid for it. I promise. Like the rest of you I’ve been reading a lot of “pro” and “con” material about the possibility of a Canadian housing bubble. Including the dramatic material from our latest issue. And I have a couple of problems many of you will have shared in trying to follow the debate. One, my own involvement in the housing market (and we’re all involved, on one side or the other) makes it difficult for me to set aside wishful thinking. Two: the data are awfully slippery. A lot of what we hear is anecdotal; a lot more of what we hear, even from informed sources, seems little better than anecdotal; and where there is solid information about things like debt-to-income ratios and movements in good indices of housing prices, it’s hard to interpret.
The fact is, no one is really sure what to make of the many natural laws of housing prices whose existence has been asserted and whose revenge upon us (us owners) has often been promised. Though we do now know that one formerly popular law, “Housing always goes up”, ain’t much good. (Damn. No free lunch, you say?)
What I decided to do was this: Continue…