Canadian house prices fall for third straight month

By Leith van Onselen

Just weeks after Moody’s warned that Canada’s (as well as Australia’s) housing market (and banks) were at risk, Teranet has reported its results for November, which recorded its third consecutive fall in Canadian home values, let by Canada’s biggest city Toronto:

In November the Teranet–National Bank National Composite House Price Index™ was down 0.5% from the previous month, the third consecutive monthly decline and the largest for a month of November outside of a recession. Indexes were down for four of the 11 metropolitan areas surveyed: Toronto (−1.4%), Hamilton (−1.6%), Ottawa-Gatineau (−0.8%) and Edmonton (−0.7%). Indexes for the two West Coast markets, Vancouver and Victoria, were flat. Indexes were up for Montreal (1.0%), Quebec City (0.9%), Halifax (0.8%), (Calgary 0.7%) and Winnipeg (0.5%). For Toronto it was the fourth straight monthly decline, for a total drop of 7.1%. For Hamilton it was the third straight decline, for Ottawa-Gatineau and Edmonton the second.

The below charts paint the picture.

First, here’s the house price index nationally and across the major markets:

And here’s the year-on-year changes:

Sydney, Auckland, Toronto. It seems Australia, New Zealand and Canada are all experiencing synchronised housing down turns in their biggest cities.

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Comments

    • Also… How the hell you “can’t pay the bills from time to time, happens to the best of us”?! Me thinks Nathan The Investor is doing something wrong… but hey – what would I know, I’m not a seasoned investor like he is! Hell – his strategy is straight copy-pasta from the Monopoly game! And, he’s in the business of “buying” not “selling” … Never in my life would I have thought of doing that, so obviously he’s got me there…

      FMD! How these people still draw air, is a mysterious mystery to me….

    • “Foundation properties”
      “unable to pay bills like council rates, MORTGAGE”
      “common problems on road to be a billionaire”
      “banks are not lending”
      “APRA has been tightening”

      BUT “you dont become property billionaire by luck”!

      I am 150% sure that most spec/infestors would not even know what is APRA and what is it supposed to do!
      I pity the homeless but if I see him roaming around homeless in the near future, trust me, I will post a pic on twitter, take a selfie with him. So that I can show it to my son (when he grows up) what property billionaire built on credit looks like.

    • > You know Ino, the likes of him will be feeding a lot of slimey legals as the industry “unfolds”

      Some, yeah… most however – will go bankrupt and that’ll be the end of that. Not a lot of pickings on someone who’s just thrown in the towel before the fight.

    • I think you are mistaken there.. This video looks like “please come and sign up with us, please please please”…. which is clear sign that he is experiencing problems. – this is in November

      Come December, he has not motivation to be enthusiastic because for the next month or two months he knows no one will turn up at the office due to Christmas/Summer.

      • treibs,
        I take it from that comment that you of course are not a property billionaire or nowhere close to being one.

        Waadyaknow… property billionaires struggle to pay council rates and sometimes even mortgage! whhoocuddahaveknoown?

        The funniest bit is when he literally goes defensive saying ” although i am struggling but I can assure you I am not living on tune cans”…. errrrr.. i have not heard an actual property mugal ever… freaking ever refer to ‘can of tuna’ in thier letter to investors!!!

      • In fact, Nathan is no more than masquerading as a property mogul and “wealth builder” to drum up sales. He is basically a buyers’ agent with ancillary services, i.e., a mortgage brokerage, property management affiliate and conveyancing services, etc. I’m sure we will hear a lot more about him as our south east markets “cool” even further.

      • Reminds me of the two mortgage brokers in the Big Short. He’ll be hitting the unemployment line soon I hope.

  1. Possibly … their Central Banks and bankers generally are learning from the Irish ’07 experience … about the massive risks of excessive housing prices and lending ‘multiple stretch’ …

    Remember … we discussed the Irish housing market at Kiwiblog back in June … again … (then Government / National Party supporters … who clearly did not welcome my comments … note downticks !) …

    http://www.kiwiblog.co.nz/2017/07/general_debate_20_july_2017.html/comment-page-1#comment-1971764

    LEARNING FROM THE IRISH 2007 HOUSING CRASH … THE SEVERE COSTS OF MULTIPLE STRETCH …

    It’s high multiple lending that ‘does in’ the Banks and their customers … as they learned with the Irish housing bubble collapse in 2007.

    The New Zealand Banks are in no hurry to repeat the 2007 Irish experience … when the housing bubble burst there … putting all its Banks to the wall and requiring bailouts exceeding 70 billion euro or about $NZ 109 billion.

    Irish housing across its metros on average went from 4.7 times annual household income in 2007 to 2.8 a few years later … refer the schedule of Demographia Surveys at http://www.PerformanceUrbanPlanning.org .

    Australia is currently 5.5 times … New Zealand 5.9.

    Why should the New Zealand and Australian Banks be more resilient than the Irish ones ?

    What was the capital base of the Irish Banks in 2006 and 2007 ?

    If a 4.7 unweighted median multiple across its metros blew the Irish banks out of the water, how come ours are supposed to survive 5.5 and 5.9 respectively with (in New Zealand’s case) a skinny capital base of just $NZ30 billion and a $NZ1 trillion (CoreLogic estimate) housing market with in excess of half it bubble value ?

    Following the bust, the Central Bank of Ireland found it was high income multiple lending that did the most damage to the Irish Banks … and it imposed a general lending cap of 3.5 times annual household incomes.

    A year earlier the Bank of England had capped at 4.5 times.

    In normal housing markets house prices should not exceed 3.0 times annual household income, requiring sensible mortgage loads of about 2.5 times (Demographia Survey).

    The days of housing inflation are over. That’s for sure.

    Welcome to the real world.

    http://www.kiwiblog.co.nz/2017/06/general_debate_8_june_2017.html/comment-page-1#comment-1946526

    Make a point of watching this excellent interview … where the antics of the twits from Merrill Lynch get mentioned as well …

    Prof Bill Black & others discuss the Irish financial system performance … Youtube

    https://www.youtube.com/watch?v=t7zd5dRILBw

    • … Mid – November Interest Co NZ report …

      The latest RBNZ survey of house price expectations brings a sharp dive in those seeing gains in the future. In fact capital gains may have vanished; the risk is now to the downside … Interest Co NZ

      https://www.interest.co.nz/news/90954/latest-rbnz-survey-house-price-expectations-brings-sharp-dive-those-seeing-gains-future

      Each quarter, the RBNZ conducts a survey of household expectations.

      (Well, actually they take data from the UMR Research “nation-wide telephone omnibus survey”.)

      The questions the Reserve Bank is interested in relate to consumer price inflation and also house price inflation.

      Specifically, the questions about expected house price inflation are: … read more via hyperlink above …

    • Wow, can you imagine being one of the lucky few to get in on a house at 2.8x household income? If that was me I’d spend the next 30 years telling younguns about how I worked hard, got a good job and blah blah blah. 2.8…you’d pay that off in no time.

      • … Excuse the typos within this article … some corrections by Pavletich …

        Partitions and units may deliver up to 180,000 dwelling spaces … Chris Hutching … The Press / Fairfax NZ

        https://www.stuff.co.nz/business/99848810/partitions-and-units-may-deliver-up-to-180000-dwelling-spaces

        … extract …

        … The idea has been scotched by house affordability researcher Hugh Pavletich who said it was ill-conceived and would make no difference to pricing. …

        … concluding …

        … However, researcher Pavletich (said) such measures ignored the far greater problem of land affordability.

        “On the outskirts of Auckland development land costs about $2 million a hectare and in Christchurch about half that. The prices should be the equivalent of rural land at $20,000 to $50,000 a hectare.

        “The sole reason is the zoning lines on maps put there by planners.

        “Ideas like partitioning are just a distraction.

        “But after 15 years or more lobbying about this I’m incredibly encouraged by the new Government’s acceptance of doing away with urban boundaries and funding infrastructure though bonds, and that comes from an old Tory,” Pavletich said.

  2. Pretty good article but might just need to tweak it…

    “It seems expat Chinese hot money is experiencing synchronised housing down turns in their biggest Western cities.”

    There ya go.