This chart  shows the detached housing prices for Vancouver, Calgary, Edmonton, Toronto, Ottawa* and Montréal (*Ottawa are combined residential). In January 2012 Canadian real estate prices offered up surprising volatility. In the west, Vancouver's high end flippers wowed the market with a 16.6% single month gain in average  SFD prices while in Calgary, SFDs dropped another 3.4% M/M and are trading at prices from 5 years ago and rank first in Canada with the biggest dollar loss ($67,237) in equity since their peak in July 2007 (Plunge-O-Meter). In central Canada, it was rally time for Toronto, Ottawa and Montreal as prices recovered from the December sell off especially in Ottawa with 5.1% M/M gain in combined residential prices  (Scorecard). "Real" interest rates are on the move (up) with the plunge in CPI and the uptick in the treasury yield curve. It's not a trend yet, but definitely something to watch. Holding real estate in a rising rate environment will require dusting off those calculators and figuring out your ROI here. 

This chart shows Vancouver detached, attached (townhouse) and apartment (condo) prices. In January 2012, detached house prices shot up by over 16% M/M and added on a $147,000 one month gain to set the new Canadian record for pricing 4 walls and a roof. Flippers at the high end are skewing the data; here's one for you (thanks to VREAA). Flippers at the "low" end have problems. Prices for townhouses and condos peaked last July and April and are down 11% and 9% respectively since they peaked.

The 8th annual Demographia study places Vancouver as the second most unaffordable housing market in 325 international markets (Hong Kong is 1st). Vancouver's median house price to median income ratio is 10.6, whereas New York and London have ratios of "only" 6.2 and 6.9. We are not a world class financial center. We export our resources without finishing them, we build computer games and work for WalMart.

The average earnings in BC did tick up in November but have been trailing the national trend for 25 months and remain 3.8% below Canada's national average (Earnings Chart) and are 19.2% below Alberta earnings where they dig stuff out of the ground as well.

The new 2011 Census was just published and Vancouver's population grew by 9.3% and our "private dwelling" housing stock grew by 9% and our "occupied by usual residents" grew by 9.1%. We have not run out of housing, and according to my calculation, it now takes 4.1 average BC wage earners to buy an average Vancouver SFD.

The "Green Hornet" keeps a Youtube archive of Vancouver Real Estate News here. The VREAA aggregates the word on the street here.

This chart shows the year over year rate of change in the price of Vancouver, Calgary, and Toronto detached housing as well as the S&P TSX Real Estate Index. In January 2012 the TSX Real Estate Index remained hovering above the flat momentum line after it crashed six months ago as cash buyers fled the casino. On the street, Vancouver momentum surged through extreme enthusiasm on the way to a shot at Irrational Exuberance. We need another few data points to see if the flippers can sustain the action; at this point it requires ever diminishing greater fools to come along. Meanwhile Toronto's enthusiasm sunk towards the flat line and Calgary dipped into the negative again. The last time the TSX bulls failed to break out (May 2007); 18 months later they found themselves at the Get Me Out Level (down 40% Y/Y). This time, everyone's tweeting so I expect the next swoon to be as dramatic.

This chart shows the S&P TSX Real Estate, Gold, Energy and Financial Services Indices as well as the Bank of Canada Commodities Index (CRB) all valued in CA$. In January 2012 Gold got back on the rally chopping around inside the sideways channel. Energy, real estate and the financials are also range bound. The CRB continues to drift down and it shows up in the falling CPI and rising real rates as well as rising "real" price of gold. Gold is out performing all other commodities and especially real estate. Gold is very liquid while Real Estate can be a "slow" asset and become unsellable (See here and here). Check your return on investment with this Evaluator; if buyers suddenly vanish you might have to look for tenants and then your hope for capital gains becomes a job of managing a Return on Investment, if there is one.

This chart shows the ratio of CA$ Gold Bullion over the TSX Real Estate Index (Gold/RE) as well as the ratio of the CA$ CRB (Commodities) Index over the TSX Real Estate Index (CRB/RE). Housing is a bundled commodity (lumber, steel, copper, materials, fuel to get to the site) and the CRB/RE and the Gold/RE ratios had been moving parallel to each other up until the fall of 2008 when the Gold/RE ratio began to diverge up with the massive sell off of real estate and the spike in gold. Since that pit of gloom in equities and commodities, the TSX real estate buyers have been extending their gains but Gold has been outperforming. I have added the Gold/CRB ratio (dashed pink) to track the "real price of gold". When commodity prices fall, the balance sheet of gold miners improve even if the nominal price of gold remains flat. As of January 2012 gold bounced off of support to carve out a consolidating base along the trend line and with the CRB dropping the Gold/CRB ratio moved up. Meanwhile the Gold/RE ratio moved down with the bullish action in the TSX real estate index rising nearly 5% M/M. Notice the CRB has been range bound for 2 years and has not headed back up to retest the peak when oil spiked to $147/barrel in the summer of 2008. A falling CRB is excellent for gold miners and ultimately good for house buyers as the replacement value for real estate falls.

This chart shows Vancouver, Calgary and Toronto detached housing priced in ounces of gold valued in CA$. Gold mining share prices rise as the "real price" of gold rises eg: the Gold/Commodities Ratio because the commodity cost (fuel, materials, equipment) is falling against the nominal price. See the Homestake Mining Chart from 1924 to 1935. Bullion attracts investment when credit markets contract because of its classic use as a hedge against currency depreciation and its ability to act as money. The millionaire metric allows you to see what your dollar is worth and the (declining) amount of gold you need to be a millionaire. In January 2012 the spot price of gold bounced back up causing the millionaire metric to tick back down towards trend but the sudden January data spike in Vancouver SFD prices has now priced an average house beyond that of a millionaire. Despite the Vancouver outlier, it requires 54% less gold to be a millionaire now than it did 5 years ago. See also the GOLD/CRB ratio here.

This chart shows the 10 Year Less the 2 Year Canadian Bond Yield Curve (dotted yellow line) as well as the 1 month, 2 year, 10 year and 30 year Bank of Canada treasury yields and the retail 5 Year Fixed Mortgage Rate. In the spring and summer of 2004 the 10's less 2's renewed its trend to narrowing as the demand for speculative short term money ballooned and the curve set off on a path towards inversion igniting along the way a 3-4 year buying spree of over-leveraged assets, (commodities, real estate, junk bonds). In the Spring of 2007 the 10yr less the 2yr went negative and the party continued except in Alberta where nominal prices peaked and were never seen again despite the giddy speculation in the rest of metro Canada. In the spring of 2008, the curve shot up as short administered rates plummeted against firming long rates but the party kept right on going. In January 2012 the BoC continued to hold steady at 1.25% as did mortgage lenders keeping their 5yr fixed rate mortgage at 5.29% just above the record low rate last seen Sept 2010 and Jan 2011. Notice the falling curve of the 10yr less the 2yr rate (yellow dashed); it's slumped below the BoC rate. Is this a prediction of another negative spread (see July 2007 on the chart) that will fuel another mad speculative fury in real estate (see Vancouver's Madness) and or commodity prices? Or has the party stopped and this is just a reflection of the government imposed "tax" on savers? I have added the "real" rate on the long bond (Interest Rate Chart) which ticked up positive (with a falling CPI) as the whole treasury curve ticked up this month. Too soon to call a trend change, but boardrooms full of mortgage lenders are looking at this as well.

This chart shows that in January 2012 the spread between the Bank of Canada rate and the residential 5 year fixed mortgage rate remained unchanged as the banks kept their posted 5 year fixed mortgage rate at 5.29% and the BoC held its rate at 1.25% continuing to suppress the real cost of money and distorting market pricing. The December CPI print dropped 6 beeps to 2.3% well below the May 2011 high of 3.7% and produced the 26th straight month of negative real rates forcing otherwise 'conservative' Canadians to become either reckless investors chasing after yield or penny pinching martyrs watching their savings evaporate. The "real" rate for the long bond ticked up into a slightly positive yield (0.2%) with the CPI plunge and the uptick in the long bond. The failed Government policy of urging Canadians to borrow at low rates and spend at high cost (rather than learning and becoming productive) is "taxing" savers and is not helping to increase productivity or produce employment.