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Last 30 days Active/Sold

Please work out the MOI yourselves

1) Maple Ridge

651/45

2) Pitt Meadows

49/12

3) Sunshine Coast

589/31

4) Richmond

990/80

5) Vancouver West

875/110

6) West Vancouver

440/60

7) Burnaby

455/71

8) Squamish

192/11

9)Port Moody

123/13

10)Surrey

2165/218

11)Abbotsford

747/49

12)Mission

515/26

13)Cloverdale

299/33

14)Langley

830/96

15) North Van

292/96

........

Van West Attached:

2313/303

Richmond Attached

1415/135

Surrey

1750/150

Interesting article form Andrew Coyne

Here. Lets call it the baby bear case. He says we will see weakness but not a collapse in RE and pokes fun at the 'forever-in-crisis reporting' of Macleans. It is a valid view-point which we need to consider.

It also fills me with dread that a crappy biased tabloid like Macleans which sensationalizes 'news' in between the fawning pieces about convicted criminals, like Conrad Black, written by their wives.. is now on our side (again). Oh no! the kiss of death.

Did they complain about the doubling of the CMHC or ZIRP or lax bank lending for the last 4 years like we did? have they admonished Flaherty for lack of CMHC or bank oversight? Hmmm

HARBINGERS OF DOOM

Andrew Coyne Apr 10, 2012 – 6:00 AM ET | Last Updated: Apr 10, 2012 11:55 AM ET

Even by Maclean’s standards, the cover was alarming. “You’re about to get burned,” screamed the headline, over a picture of a house that was literally on fire. “Canada looks like the us before its devastating housing crash — maybe even worse.” And the kicker, for those still hesitating: “Why it’s officially time to panic.”

This last was doubtless something of a little in-joke. For my old colleagues at Canada’s newsweekly, it is always time to panic, especially about house prices. The magazine’s editors inhabit a world beset by all manner of hitherto undetected demons, from more expensive groceries (“sudden shortages, riots over prices, the world food crisis is about to hit home”) to insomnia (“the truth about a modern epidemic”) to, well, “The Return of Hitler.”

But nothing, nothing frightens the magazine or, it is hoped, its readers, more than real estate. For years Maclean’s has been shuddering in terror of the imminent collapse of the Canadian housing market. From the relative calm of its late 2007 cover story (“Buy? Sell? Panic?”), the magazine soon picked up signals of the coming apocalypse. “House prices start to fall,” the magazine announced the following summer. By autumn, with the world financial crisis in full swing, so was Maclean’s. “Canada’s Looming Real Estate Crisis,” the cover shouted: “Why house prices may soon fall through the floor.”

As the months wore on, and the cataclysm failed to arrive, Maclean’s remained ever hopeful of a real collapse. But durned if prices, after a brief dip, resumed rising. By June 2008, a grumpy Maclean’s was warning readers “Don’t believe the housing hype,” insisting there are “plenty of signs that the Canadian housing market is still on some very shaky ground,” even if “average home prices are up more than 16 per cent this year.”

Fast forward through several more stories in the same vein and by this year the magazine and others were in even less doubt: Canada was in a housing bubble. Why, just look at the numbers. For starters, there’s the oft-repeated fact that Canadians are carrying debts worth 153% of their annual income. That’s true: but other countries’ citizens manage much heavier debt loads, from the spendthrift Swiss (200%) to the feckless Dutch (260%) to the profligate Danes (320%). We may be carrying almost as much debt as the Americans before the crash, but with nothing like the same risk factors, from subprime mortgages to small regional banks, that made their economy such a firetrap. And if we’re mentioning how Canadians’ debts have grown, we should surely also mention that their assets have as well: still five times as large as their debts.

Mortgage costs, interests and principal combined, are currently running at about 30% of disposable income — again, higher than a few years ago, but barely half what they were in the early 1990s. Yes, house prices were still rising as of year-end, but more slowly than before, as even the Maclean’s piece acknowledges — though somehow it cites this as evidence for its doomsday thesis. But then, what doesn’t? If prices were rising quickly, that would be proof of housing “mania.” If they fell a little, that would be the bubble starting to burst. And if they fell a lot? Look out below!

The truth is the real estate market is cooling slightly, helped by a modest tightening of lending regulations. It’s true that a rise in interest rates from current, historically low levels would put some homeowners in distress, but they’d have to spike a long way before the damage grew widespread — a concern, sure, but nowhere near as frightening as, say, the return of Hitler.

Posted in: Financial Post Magazine Tags: Canadian Housing Bubble, Maclean's, Real Estate

You do it...no you do it...no..

It would almost be farcical if the stakes were not so high.

The banks are begging to be regulated. "stop us from lending so irresponsibly" they are pleading to Flaherty. "We can't stop ourselves. While the other guy is pushing debt, we have to do so too, or our bonuses will suffer".

Flaherty says he won't have anything to do with it. He is a free-marketeer after all, see what they did to the Wheat Marketing Board. Unless of course you are the CMHC.

Carney witnessing the catastrophe of debt he has helped unleash is begging both sides to - please show more restraint.

Now consumers have their say. Don't lend us so much! They have this sweet naive notion that the banks who are lending them the money are somehow working in their best interests.

How cute!

Will no-one accept responsibility??

Carney says he will be forced to raise rates if Canadians do not moderate their HOUSING debt

Yeah- right! >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Had an interesting Conversation with a Westside Real Estate agent at an open house today. It was near the end and he was in a chatty mood. His listing was priced rather high I thought and told him so. He admitted it was priced for the "mainland" buyer.

I always thought Vancouver was on the mainland but obviously it means something else. His open house visitors were 50:50 'Mainland ' and Local.

Said, even though the listing was a few months old, no anxiety from the sellers (who obviously did not live in the place) to sell. "Interest rates are key. While rates are so low, the opportunity cost of not selling is low . Carrying costs are low and if you do sell you will only get 1% in a GIC on the money you make . So no one is too rushed.

If rates move up to the normal 4-5%. Then things will change very quickly."

Don't hold your breath waiting for Carney to go there. His idea of raising rates to temper this speculative mess, is a 0.25% rise.

Finally he said, "it isn't really prices that have risen so much, it is money that has become worthless."

I guess that depends who you are. If you have a high income in Vancouver and can access low rates or can get your hands on HAM then times are very good. If you are a Greek or Spanish or even a US worker, then money is getting more scarce.

Finally!

Someone does something

The OSFI has started to get more involved in the financing of the housing market. It has also told the Big Bank bank board of directors to actually do something more than pick up their monthly cheques and monitor the risk in the institutions they are supposed to direct.

Bloomberg- long a critique of the cosy relationship between banks, government and the CMHC has the best report on this today.

Canada Boosts Housing Oversight as Banks Warn on Economy

By Andrew Mayeda and Greg Quinn - Apr 4, 2012 7:14 AM PT

Canadian authorities are stepping up oversight of the nation’s housing market even as lenders such as Bank of Nova Scotia warn that tougher rules could threaten the economic recovery.

The country’s banking regulator, known as OSFI, said yesterday it will boost supervision of private mortgage insurers while examining “emerging” risks to the financial system in several areas, including residential mortgages.

Policy makers, including Finance Minister Jim Flaherty, have said that parts of Canada’s housing market have become overvalued as consumers add to record debt levels, encouraged by some of the lowest mortgage rates in decades. Flaherty said in his budget last week the government will enhance supervision of Canada Mortgage & Housing Corp., a federal agency that insures some mortgages.

Scotiabank (BNS) chief executive officer Richard Waugh warned about making reforms to CMHC that could have “unintended consequences” and cause the market to slow too much. “Canada’s model, which has been so successful, is let the banks manage and let the policy makers set macroeconomic policy, monetary policy, and good strong regulatory supervision,” Waugh said yesterday in an interview in Saskatoon, Saskatchewan.

Bank of Canada Governor Mark Carney said in an April 2 speech that households relying on debt financing represents “the biggest domestic risk” to the economy. Some Canadians would be vulnerable to a sharp decline in housing prices, the central bank said in its latest Financial System Review.

Home Prices Rising

Home resale prices rose 6.5 percent in January from a year earlier, according to the Teranet-National Bank Composite House Price Index (TNBHICY%). The S&P/Case-Shiller index of property values in 20 U.S. cities fell 3.8 percent in January from a year earlier after dropping 4.1 percent in December, a March 27 report from the group showed.

The country’s resale housing market is overvalued by 10 percent to 15 percent and there is an oversupply of new homes, Toronto-Dominion Bank economist Sonya Gulati said in a March 22report. “These excesses should be gradually unwound over 2013 and 2014, with higher interest rates the impetus for the adjustment,” she said.

The Ottawa-based Office of the Superintendent of Financial Institutions said yesterday it will produce a report for Flaherty on government guarantees on mortgage insurance. An OSFI spokeswoman, Leonie Roux, said the report would apply to private insurance providers such asGenworth MI Canada Inc. (MIC) and not CMHC.

Government Guarantees

The federal government guarantees the full value of mortgage insurance offered by CMHC, which had C$541 billion ($546 billion) in insurance in force at the end of September. The government guarantees 90 percent of insurance offered by private-sector companies.

“Elevated household debt levels not only make households vulnerable to adverse shocks but continued low interest rates could encourage even higher household indebtedness,” OSFI said in a planning document released on its website yesterday.

Consumers “could become a source of negative domestic influence if they take action to rein in spending to address their indebtedness,” OSFI added.

Consumer spending has led economic growth since taking the country out of recession in 2009. The Bank of Canada projects households will be responsible for more than half of the country’s 2 percent economic growth this year.

The government said in the budget it will enhance the governance and oversight of CMHC to “ensure its commercial activities are managed in a manner that promotes the stability of the financial system.”

Strengthening Oversight

The government is considering whether OSFI can play a role in “strengthening the oversight of CMHC’s commercial operations,” Chisholm Pothier, Flaherty’s chief spokesman, said yesterday in an e-mail. OSFI doesn’t currently regulate CMHC, instead, it reports to the country’s parliament through Human Resources and Skills Development Minister Diane Finley.

“Someone is going to have to safeguard CMHC, and I would assume that falls under OSFI,” said Ian Pollick, senior fixed- income strategist at RBC Capital Markets in Toronto. “There is no other real national regulator.”

The budget also said the government will introduce legislation on covered bonds under a system to be administered by CMHC.

Covered Bonds

Most covered bonds issued in Canada are secured by mortgages insured by CMHC. A government consultation paper in May asked for input on whether the law should encourage banks to secure covered bonds with uninsured mortgages, a move that may lead banks to rely less on CMHC insurance. The budget didn’t specify how the government will proceed on that issue.

The government also didn’t say whether it will raise CMHC’s C$600-billion limit for insuring mortgages. CMHC said Jan. 31 it has been rationing bulk insurance offered to lenders as the corporation approaches its legal limit.

Flaherty has tightened rules on mortgage insurance three times since October 2008. He appears to be taking a “wait-and- see” approach to determine if the market is headed for a soft landing before he acts again, said Finn Poschmann, vice president of research at Toronto-based think tank C.D. Howe Institute. “If the growth in mortgage credit and home-equity lines of credit doesn’t tame itself, we can expect the finance minister to respond,” he said.

‘Greater Security’

Ron Olson, president of the Canadian Home Builders’ Association, said he was pleased that Flaherty opted to leave mortgage insurance rules unchanged in the budget. The plan to enhance supervision of CMHC “brings greater security to housing markets,” Olson said by telephone last week.

The government should “hit the pause button” to take stock of the new rules put in place since the financial crisis, and whether such changes may have “unintended consequences,” Terry Campbell, president of the Canadian Bankers’ Association, said yesterday in a speech in Ottawa.

Canada’s banks have been ranked the soundest in the globe by the World Economic Forum in part because they avoided the subprime loans that crippled many U.S. lenders during the financial crisis.

To contact the reporters on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net; Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.ne

In other bank related news..share-holder activists are complaining that Bank CEO pay is too high. The 'going rate' seems to be $7M for a small bank and $10-15M for a big bank. The response is that they are many other CEO's being paid a lot more.

HERE os the list FWIW. You will have to scroll across to get to the total. No one's starving, that's for sure.

REBGV news release

HERE

Here is the meat and potatoes...

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $679,000, up 5.3 per cent compared to March 2011 and an increase of 1.1 per cent compared to February 2012. The benchmark price for all residential properties in the Lower Mainland is $607,700, an increase of 4.8 per cent compared to March 2011.


Sales of detached properties on the MLS® in March 2012 reached 1,183, a decline of 34.1 per cent from the 1,795 detached sales recorded in March 2011, and an 11.5 per cent decrease from the 1,336 units sold in March 2010. The benchmark price for detached properties increased 9.2 per cent from March 2011 to $1,056,400.

Sales of apartment properties reached 1,191 in March 2012, a decline of 26.6 per cent compared to the 1,622 sales in March 2011, and a decrease of 4.9 per cent compared to the 1,252 sales in March 2010. The benchmark price of an apartment property increased 2.2 per cent from March 2011 to $375,100.

Townhome property sales in March 2012 totalled 500, a decline of 24.6 per cent compared to the 663 sales in March 2011, and an 8.9 per cent decrease from the 549 townhome properties sold in March 2010. The benchmark price of a townhome unit increased 0.9 per cent between March 2011 and 2012 to $480,900.

............................

Big drop in sales. SFH benchmark up a good chunk from last year, but attached and apartments flat and could be down YOY next month. Can that be possible? down YOY in Vancouver! We won't bet the bank on it (they are already doing that themselves), we will just keep our fingers crossed.

BTW- check out the link I put up in the comments sections in the previous post, about the games that Royal Bank may have played, if the allegations are true, and they have undertaken these huge 'wash sales', then the biggest loser could be the tax-man ie us. Not enough that we have to carry the burden of the CMHC....

I'm back and so it would seem is the Housing correction

Average SFH prices down 6%.

Lets see what the median brings.

This is exactly what we want, a minor drop, which will not panic the Federal or Provincial government and lead to more catastrophic financial decisions.

I will look at the MOI's for different areas in a day or two.