An Update On Canada’s Housing Bubble

Takeaway: Vancouver home sales are still getting slammed, with the Y/Y growth rate further deteriorating to -26% in September from -18.9% in August

An Update On Canada’s Housing Bubble - z cana

 

Earlier this week Hedgeye Financials analyst Josh Steiner released his proprietary Hedgeye Canada Tracker to keep tabs on what he sees as an “ongoing housing bubble” in the economy.

 

As Bloomberg reported earlier this month:

 

“A tax on foreign homebuyers in Vancouver cut luxury purchases in Canada’s priciest housing market by more than half last month, according to a brokerage report. Meanwhile, high-end sales in Toronto surged.

Transactions in Vancouver of at least C$1 million ($759,000) slid 65 percent from a year earlier to 95 units in August, the month that a 15 percent transfer tax on deals by non-Canadian homebuyers took effect, according to Sotheby’s International Realty Canada. At the same time, luxury-home sales in Toronto and its suburbs doubled to 1,459 units, the high-end brokerage said.”

 

In particular Steiner’s Canada Tracker is picking up a more broad-based slowdown in Vancouver’s housing market.

 

Here’s Steiner’s analysis:

 

“Vancouver home sales are still getting slammed, with the Y/Y growth rate further deteriorating to -26% in September from -18.9% in August… Teranet data still shows Vancouver home price growth accelerating, to 24% YoY. However, the deteriorating average home sale price from the Real Estate Board of Greater Vancouver in the chart below makes more sense to us, given the disaster that home sales in the region have become.”

 

An Update On Canada’s Housing Bubble - canada 1