Sept 16, 2010
It’s become outrageous. For months the media and some “analysts” have been in hysterics over the encroaching Canadian housing collapse.
They’re sounding like a bunch of false prophets.
Data released each month shows Canada home prices as either stable or rising. The most accurate data point, the Canada House Price Index, by the Bank of Canada and Teranet, shows smooth and steady price gains since the beginning of this year, with a current year-over-year increase of 4.74%.
Even the notoriously skewed monthly statistics by the Canada Real Estate Association (CREA) suggests balance in the market. According to yesterday’s CREA report, home sales activity rose 4.1% in August from the previous month and home prices rose in every province besides Alberta and New Brunswick.
Nevertheless, some analysts continue to preach impending doom for Canada’s housing market. TD Bank Financial Group economist Francis Fong said yesterday that sales will drop by 20% and prices by 7% on a national basis in 2011.
What the hell is he talking about?
“In an environment characterized by highly indebted Canadian households, a moderation in job growth and personal income, and the fact that demand was frontloaded in 2009, we expect the cooling in the housing market to continue through the remainder of 2010 and throughout the entirety of 2011, ” Fong wrote in the report.
So, according to Francis Fong, house prices across Canada are going to slide 7% in 2011. Thats a big slide! Sounds like a bunch of baloney.
Towards the end of this month the Canada House Price Index will release its next report and I’d bet my bananas prices will be up and will continue to rise well into 2011.