Home News The Most Splendid Housing Bubbles in Canada, November Update: Fastest 5-Month Plunge on Record

The Most Splendid Housing Bubbles in Canada, November Update: Fastest 5-Month Plunge on Record

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Crash-era declines are faster than bubble-era rises: peculiar to some cities. A vague sense of humor wafts around the charts.

To wolf richter for wolf street.

The 11-city Terranet National Bank house price index overall fell 0.8% in October from September and 7.7% from its peak in May, the largest five-month period in the data’s history since 1997. fell. Year-on-year he rose to 4.9% in March and from a range of 19% in April.

Nine of the index’s 11 cities experienced month-on-month declines in October, with Halifax leading the way with a 5.7% decline. In Hamilton, after a tremendous surge from its May peak, prices have plummeted by 15.9% and are now roughly flat year-over-year. The oil cities of Calgary and Edmonton where the housing market has been dormant for 15 years.

HamiltonPrices tend to fluctuate in parallel with Toronto.

And it’s now #1 in terms of rate of decline from peak. October: -2.9% for the month, -15.9% from May peak. almost flat compared to the previous year.

Falling faster than rising: The index plunged faster during the first 5 months of the plunge (-69 points) than the spike during the last 5 months of the bubble (+65 points).

A vague sense of humor wafts around and then unwinds around this kind of ridiculous price spike. This makes us wonder about the functioning of the human brain.

Halifax Second in terms of drop from peak. October: -5.7% for the month. It is -14.0% from its June peak, down from over 35% in early 2022 to +6.7% YoY.

Again, the index plunge (-41 points) during the first four months of the plunge was faster than the surge during the last four months of the bubble (+31 points).

This graph is the perfect proof that central bank interest rate restraint and quantitative easing (the entire free money era) have created a virus that muddy the human brain. I have previously observed in implosion stocksAnd once central banks end the free money era, the brain will start to recover, let’s see what happens.

Greater Toronto Area The decline from the peak is the 3rd place. October: -0.9% month to month, -11.9% from peak in May, +3.6% YoY.

Equity indices have fallen at about the same pace they have bounced in the last five months of the bubble.

Victoria 4th in terms of drop from peak. October: -1.2% for the month. Down -10.4% from its peak in May, the year-on-year rise he fell to 2.1%.

The index plummeted faster during the first five months of the burst (-32 points) than it surged during the last five months of the bubble (+24%).

Canadian home prices responded faster to rising interest rates than U.S. home prices, and they still do, but mainly in Canada, where most mortgages are either variable or variable rate with all sorts of guardrails. , with a fixed interest rate such as 2 years. 5 years. So when interest rates start to rise sharply, existing Homeowners began to face the prospect of higher mortgage payments in the future. This is in addition to potential homebuyers looking to pay their mortgages at these rates and prices, which they can’t afford.

The methodology of the Teranet-National Bank House Price Index is based on “repeated sales,” which tracks the price of the same home each time it is sold. Unlike median pricing, the “repeat sale” method is not affected by changes in the mix of homes sold. The index was set at 100 for all cities in June 2005. All my charts here are to the same scale.

Ottawa 5th in terms of drop from peak. October: -1.8% for the month. A decrease of -9.6% from its peak in June, the year-on-year increase he fell to 2.8%. The index is now below its July 2021 initial level.

Greater Vancouver The fall from the peak is 6th. October: -0.1% for the month. A -7.9% decline from its peak in April, the year-on-year gain is 3.7% for him.

Winnipeg 7th in terms of drop from peak. October: -3.1% for the month. A -7.5% drop from its peak in June, the year-on-year gain is 3.9% for him.

Falling faster than rising: The index fell faster during the first four months of the plunge (-21 points) than the spike during the last four months of the bubble (+19 points).

montreal, October: Monthly -1.5%. -6.4% from its peak in June, up 8.4% year-on-year:

Quebec City, October: -1.2% for the month. Down -3.6% from its peak in July, the year-on-year gain is 8.6% for him.

Oiltown is still an exception.

in Calgary, Canadian oil capital, October: new record at +2.0% monthly. +16.2% YoY. Prices were pretty much flat from his mid-2007 to mid-2020.

in Edmonton, The Canadian oil patch in October also hit a new record with +2.1% month over month. +7.5% YoY. The index is now slightly above its mid-2007 level.

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