After decades of stoking mortgages, Ottawa in a mess of its own making

Required reading!

http://www.theglobeandmail.com/report-on-business/economy/housing/after-decades-of-stoking-mortgages-ottawa-in-a-mess-of-its-own-making/article13705668/

"It’s getting hard to keep track of how many times the federal government has tried to lasso the galloping housing market.

The latest is a move by Canada Mortgage and Housing Corp., a federal Crown corporation, to limit the guarantees it offers banks on their mortgage-backed securities."

"The federal government has had a major role in stoking the rapid expansion of mortgage credit in Canada. Now, as the long credit-fuelled rush into real estate appears to be stalling, taxpayers could be stuck with a large and unexpected bill.

Three-quarters of all Canadian mortgages are insured by the federal government, up from only 30 per cent in 1988. Ottawa guarantees a total of $900-billion worth of mortgage insurance."

...

CIBC Chief Economist Benjamin Tal: "If I were a speculator, I wouldn't be buying"

With home boom winding down, is housing market on death watch?

http://www.ottawacitizen.com/business/real-estate/With+home+boom+inning+even+good+news+portend/8775198/story.html

Benjamin Tal, CIBC's housing expert and deputy chief economist, wouldn't go as far as Madani in predicting a price correction of as much as 25 per cent, but he agrees the time has come for caution.

"If I was a speculator, I would not be buying," he says. "The days of flipping houses and speculating on increasing prices are clearly coming to a close. We are in the ninth inning of this boom."

"The ride must end, agrees Tal, the only issue being is will it crash or simply coast."

Builders bet housing boom ending as residential land investment falls

http://www.theprovince.com/business/Builders+housing+boom+ending+residential+land+investment+falls/8760124/story.html

Developers in three of Canada’s largest markets dramatically ratcheted down their land purchases in the first half of this year.

The decision to cut back the purchase of residential land may be one of the best indicators yet that the housing industry doesn’t see a lot of room for growth in the coming years.

RealNet Canada Inc. said residential land investment in Toronto fell 51% in the first six months of the year compared to the same period in 2012. Sales in Greater Vancouver fell 30% and Calgary 52% for the same period.

“Yes, 100%,” they are looking into the future, said Richard Vilner, research manager with GTA Commercial Real Estate at RealNet. “The slowdown began to happen in mid-2012. There was a big time slow down versus those robust two years pre-slowdown. The cranes you are seeing now are for residential land deals that closed a couple of years ago.”

"CMHC moves to take steam out of housing market"

www.theglobeandmail.co...e13607534/

“Given the differentials in funding costs via NHA MBS or unsecured long-term funding, I could see [an additional] 20 to 65 basis points in the cost of funding mortgages for the larger banks,” he said. “All else equal, we could see mortgage rates start to move up in unison.”

加拿大按揭及楼房CMHC,因应突然增加的需求,推出限制措施
GF:
固定利率将继续上升, 
政府这政策将造成5年固定利率在短期内上升 0.15%-0.65%

我们可以预测会继续有一些锁定利率的买家急着入市,
而这回光反照般的 成交量上升现象,在9月会随着锁定利率的过期 而急转直下

- We can expect to see continued demand that's "pulled forward" due to people with mortgage pre-approvals hurry into purchasing properties before the rate-holds expire.  We have already witnessed some of this effect in July, I expect sales to continue to be relatively strong until September, while taking a turn for the worse in the last quarter of 2013. 

July Stats

7月底 大温销售数据
2013 vs 2012
Sales: 2950 vs 2098(+41%)
Lists: 4840 vs 4802 (+1%)
Ratio: 62% vs 45%

Est Month-end Inventory: 16900 vs 18081(-6.5%)
Months of Inventory:5.7  vs 8.6 (last July) vs 6.5 (last month)

大温地区滞销量在7月底达到5.7 个月,处于 平衡 市场。
大温地区成交量在7月大幅改善,约等于过去11年的平均7月成交量。

如同月初的预测, 明显上升的固定利息造成了已有 pre-approval 的买方急着在 expire 之前出手, 造成成交量短期攀升。 
GF认为这短期的成交量上扬只不过是把下半年的成交量移前。 在8月底9月初我们可能会见到市场加速冷却的趋向。

Realtors caught in market downdraft revisit retirement plans

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/hewing-to-a-new-reality/article13323262/?cmpid=rss1&utm_source=dlvr.it&_rob_utm_medium=twitter

- Expect to hear more of the RE Bust victim stories in the coming years..

2013 Mid-year summary

Mid-year Stats (June 2013 vs Dec 2012)

Category 1: Aggregate, percent change from December 2012
-Greater Vancouver Composite MLS-HPI (+1.9%)(vs +2.7% Jun/12 vs Dec/11)
-Greater Vancouver SFD MLS-HPI (+1.7%)(vs +3.4%)
-Greater Vancouver Apartment MLS-HPI (+2.2%)(vs +2.2%)

Category 2: Average, percent change from December 2012
-Greater Vancouver detached average (+3.5%)
-Greater Vancouver attached average (+2.2%)
-Greater Vancouver apartments average (+17.2%)

Category 3: Regional SFD MLS-HPI, percent change from December 2012
- Burnaby S SFD +2.4% (vs +7.1% Jun/12 vs Dec/11)
- Coquitlam SFD +0.6% (vs +6.1%)
- North Van SFD +4.4% (vs +3.6%)
- New West SFD +3.7% (vs +4.6%)
- West Van SFD +2.7% (vs +7.8%)
- Van East SFD +2.0% (vs +4.5%)
- Van West SFD +3.3% (vs +3.9%)

- Richmond SFD +0.6% (vs -0.5%)

2013 Vancouver RE still recorded Mid-year price gain (vs year-start), though the % gain was slower than last year (and most years previously) in most areas.

Greater Vancouver Sales are higher than last year, however the sales pick-up varied greatly with region. The record-low Fixed mtg rates this Spring was likely the main contributing factor – for the people who can still qualify for mortgages.

In May/June, for SFH we see the Core (HAM/expensive areas) sales increasing at +30% to +50% YoY, while outlying areas (eg Coquitlam, Burnaby, New West, Maple Ridge, Pitt Meadows) sales were flat, or even lower than last year.

If Fixed rates continue to creep higher, we can expect to see people with mortgage pre-approvals jumping into the market before it expires (usually 60 day rate-hold). So we might continue to see a busier July than last year. However, if rates stay high, I expect to see a worse 2nd half than 2012-H2..

June 2011-2013 Greater Vancouver SFH Stats by Region

Richmond 
Sales: +51% vs 2012; -27% vs 2011
S/L Ratio: 48% vs 24% vs 48% (2011)
HPI $ YoY: -5.5% (-8,-9.1,-8.4,-9,-6.3,-6.5,-4.2,-4) (prev months' YoY % change)　　
　
Vancouver West
Sales: +42% vs 2012; -32% vs 2011
S/L Ratio: 57% vs 31% vs 65% (2011)
HPI $ YoY: -6.1% (-8,-8.5,-9.1,-9.2,-7.5,-5.5)

Vancouver East 
Sales: +32% vs 2012; -22% vs 2011.
S/L Ratio: 55% vs 37% vs 73% (2011)
HPI $ YoY: -2.2% (-2.8,-2.8,-2.6,-2.7,-0.5,+0.2)

Burnaby
Sales: -5% vs 2012; -34% vs 2011
S/L Ratio: 43% vs 38% vs 55% (2011)
HPI $ YoY: -4% (-4,-4.7,-4.9,-3.1,-2.3,+0.4)

Coquitlam
Sales: +3% vs 2012; -29% vs 2011
S/L Ratio: 58% vs 51% vs 60% (2011)
HPI $ YoY: -2.4% (-1.8,-0.4,+0.8,+1.4,+2.4,+2.9)

North Van
Sales: +36% vs 2012; -35% vs 2011
HPI $ YoY: -2.9% (-3.3,-2.6,-2.4,-2.9,-2.5,-3.7,+0.3)