Housing bubble. The phrase has almost lost all meaning to me at this point given its prevalence in the media. But the new numbers released regarding the supply of new property listings indicates that the “looming housing bubble” can be put on the back burner (at least for now).
Inventory hit levels not experienced since the market crash in 2009. And it’s not surprising! With all the media attention directed toward the housing bubble, anyone even mildly interested in the industry likely heard that prices have nowhere to go but down.
The reasons behind the impending crash were fairly clear-cut: the introduction of the HST encouraging buyers to purchase new homes before July 1 and the inevitable interest rate hikes. What’s good about this situation? The market didn’t respond exactly at the time that these things were introduced. We’re going to have a soft landing unlike our neighbours to the South. Canadians anticipated the price declines. April demand declined in seasonally-adjusted terms by 2.6% from the previous month. Buyers are being cautious.
According the Doug Porter, an economist at Bank of Montreal, said:
“I think the concern is we would have a real blow in the spring and pay the price for it in the fall. Instead, what we are seeing is the market is coming in for a soft landing. It’s moderating even before things like higher rates and GST begin to bite” Financial Post
Basically that’s a big pat on the back to savvy Canadian homebuyers. But maybe you should pat yourselves on the back anyway. You’re all awesome. Canada’s awesome.