In an article headlined “Canada’s housing market teeters precariously,” the news organization quotes economist David Madani of Capital Economics, who has been warning for some time now that residential real estate is heading for its day of reckoning, and has been out of line with other economists.
Others believe the market has staying power, having rebounded from the slump that began in the summer of 2012 when Finance Minister Jim Flaherty moved to head off a bubble with another round of mortgage insurance restrictions.
At least some of that is believed to be related to expectations of further mortgage rate increases, so that sales are being pushed forward as buyers move before they otherwise would.
Later this week, for example, the Canadian Real Estate Association is expected to report another month of surging home sales in October, something in the area of 12 per cent, The Globe and Mail’s Tara Perkins reports.
Much of the Financial Times article focuses on Toronto, and the condo market in particular, though the publication also cites Vancouver and Montreal as areas of concern.
Senior economist Robert Kavcic of BMO Nesbitt Burns said today he expects the CREA numbers this week to show average resale home prices up 6.5 per cent, driven higher by a pickup in sales from more expensive cities such as Vancouver, while the MLS home price index is projected to rise 3.4 per cent.
"Cue the bubble mongers," Mr. Kavcic added, pointing to the Financial Times article.
Courtesy The Globe and Mail 2013