Uh-oh, first sign of housing slowdown or just volatility?
Apr 8, 2010
April 8, 2010
Although economists are blowing it off, new condo permits fell in value by 28.3%. That’s quite a bit. And that’s a countrywide statistic. Also…
Residential construction intentions fell 7.5% to $3.7 billion, dragged down by a 52.5% drop in the value of multiple dwellings in Ontario. The Calgary Sun
And, as I said, economists are dismissing the figures as they tend to be fairly volatile.
Okay, so I can accept that these figures are volatile usually…but don’t you think given that everyone’s pretty worried about a housing bubble we shouldn’t just sweep them under the carpet without consideration?
Chief Economist of CREA, Gregory Klump, said:
“I don’t see anything particularly worrisome in the figures…[w]e are still near record levels of activity on the MLS listing system and still see strong demand.” The Calgary Sun
Uhh…okay. But we’re not talking about lack of demand. We know that demand is over-stimulated right now as buyers rush to beat the HST, further interest rate hikes, and the new mortgage rules. These permit numbers reflect the sentiment of developers who are likely anticipating a steep drop off in demand. I mean, okay Mr. Klump, there’s something to be said for living in the moment. But these figures are leading indicators which seem to affirm a trend we’ve been worrying about: a housing bubble pop.
So putting your hands over your ears and singing about current demand isn’t likely to help. Given that Canada’s economic recovery was led by the housing boom, we need to listen up, and listen closely.