$25,000,000 Condo Sale

Right here in Vancouver where average strata units regularly trade at 2007 prices we have what industry sources say "...is the highest priced condo to be sold on the (Canadian) multiple listing service - MLS" Source CBC

It took the previous owner nearly 2 years to find a buyer for this 6400sf 2 level penthouse overlooking Coal Harbour, Stanley Park and the North Shore Mountains. Worth the wait; the seller made a 47% capital gain in just 3 years.

Summary of Housing Price Changes for Major Canadian Cities MAY 2013

The Top of the Market bell ringing has begun in Vancouver but is not heard in Calgary, Toronto or Montreal. 



VANCOUVER average single family detached prices in May 2013 ticked up 0.4% M/M but remain 13.9% ($147,600) below their peak set last April 2012 (Vancouver Chart). On an annual basis, Vancouver is on a choppy sea of red (Scorecard) with combined residential prices down 4.3% Y/Y and detached housing taking most of the hit. Average strata units, for the commoners, continue to trade at 2007 prices but up in the penthouses it's zenga zenga and who knows, maybe bunga bunga as a $25,000,000 condo sale get's printed up in all the media as the biggest Canadian MLS condo sale on record, eg: CBC

If you are thinking of buying a Vancouver Condo as an Investment, see my Vancouver Condo Yield Case Study.

Now that you have the May data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
CALGARY average detached house and condo prices in May 2013 broke out again to new record highs (Calgary Chart) with townhouses not far behind. I have added the TSX Energy Index plot to the chart to see when correlations occur with housing prices, so far the correlation has been negative for the last 2 years. Although there is pricing joy in Calgary, it's not showing up on the Momentum Chart. What is showing up is a different world of earnings in Alberta compared to the rest of Canada.

The sentiment in Calgary is the least bearish of the 3 markets polled with only 23% of the survey thinking Calgary SFD prices will be 20% lower in 12 months. What do you think? VOTE HERE.

EDMONTON average detached house prices in May 2013 also moved up on a rally of 3.9% M/M (Canada Chart), while condo prices sold off 2.4% M/M. Where Calgary has mostly positive sales numbers, Edmonton has red ink in the Y/Y column with single family detached sales down 14.4% Y/Y and townhouses down 20.3% Y/Y (Scorecard). The current enthusiasm from bidders puts Edmonton SFD prices within a mere 1.9% of the May 2007 peak price (Plunge-O-Meter).
 
TORONTO average detached house prices for the GTA in May 2013 broke out to new highs along with townhouse and condo prices for a trifecta record breaking month (Toronto Chart). For anyone keeping score, the gap between Vancouver and Toronto housing prices (Vancouver vs Toronto) is narrowing, especially condos and marketers should note that HNWI has fallen in love with Toronto.

Never mind the boom, polled sentiment here continues to suggest that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
OTTAWA average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In May 2013 Ottawa combined residential prices retreated 0.3% M/M from the record high price set the previous month (Scorecard). Month over month sales boomed 14.7% M/M but annually are down 4.9%.

MONTREAL median (not average) detached house prices in May 2013 zoomed to a new record high replacing the last high set in June 2012 (Canada Chart). New pricing is happening on ever decreasing sales and thinning participants with combined residential sales down 9% Y/Y and condo sales down 12.4% Y/Y (Scorecard). In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 7th in Canada's 10 provinces for earnings and prints an unemployment rate of 7.8% in April; 0.1% above Ontario's.

Mandarin Management

Well someone has to move all this money around, and Bytown has a lot of history. "Ottawa" derived from the Algonquin "adawe" meaning "to trade" (Wikipedia) and the trade in real estate is booming.

The March 2013 budget is good news for Ontario and after Toronto's surge last month, it's Ottawa's turn to dial up the price of real estate and set new historical records. 

Ottawa combined residential prices are up 2.1% Y/Y  and zoomed 3.8% M/M to set an all time new price peak in Ottawa that is 2.1% above the last record high set exactly one year ago.

Summary of Housing Price Changes for Major Canadian Cities April 2013

Ottawa is the new real estate price breakout recipient while Toronto, Edmonton, and Calgary take breather. 



VANCOUVER average single family detached prices in April 2013 ticked up again but remain 14.2% ($150,800) below their peak set last April 2012 (Vancouver Chart). On the short term, price are up fractionally, but on an annual basis, Vancouver is on a sea of red (Scorecard) with combined residential sales down 6.2% Y/Y and prices down 12.6% Y/Y with price momentum solidly negative (-14.2%) and heading towards Extreme Fear on the 12 month change chart. 

Now that you have the April data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
CALGARY average detached house, townhouse and condo prices in April 2013 have all turned down from their recent record highs, Calgary Chart). I have added the TSX Energy Index plot to the chart to see when correlations occur with housing prices. Real Estate and the energy index are labouring under multiple peaks and price momentum has taken a sharp turn down and threatens to go flat. 

The sentiment in Calgary is the least bearish of the 3 markets polled with only 24% of the survey thinking Calgary SFD prices will be 20% lower in 12 months. What do you think? VOTE HERE.

EDMONTON average detached house prices in April 2013 also turned down with Calgary (Canada Chart). The bright spot was townhouse prices popping 2.8% M/M but annually they are down 0.7%. Combined residential sales although up nearly 10% M/M are down 8% for the year (Scorecard). The record high SFD prices of May 2007 are still 5.6% out of reach (Plunge-O-Meter).
 
TORONTO average detached house prices for the GTA in April 2013 backed off the high set last month (Toronto Chart) and Y/Y sales numbers are down over 5% for detached, townhouse and condos (Scorecard). The weakening sales are driving the market momentum into the flat line. For anyone keeping score, the gap between Vancouver and Toronto housing prices (Vancouver vs Toronto) is narrowing, especially condos and marketers should note that HNWI has fallen in love with Toronto.

Despite recent record highs, sentiment continues to suggest that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
OTTAWA average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In April 2013 Ottawa combined residential prices zoomed 3.8% M/M for a new record price high on a solid 34.8% M/M sales surge (Scorecard). Ottawa real estate is trading 2.1% above the prior peak set one year ago breaking out from a well defined 2 year channel. Follow the money.

MONTREAL median (not average) detached house prices in April 2013 ticked up 1.1% M/M in a narrow price channel just 0.7% shy of the peak set 10 months ago in June 2012 (Canada Chart). Prices are floating on sales resistance (Scorecard) with combined residential sales 11.4% below last year. In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 6th in Canada's 10 provinces for earnings and prints an unemployment rate of 7.8% in April; 0.1% above Ontario's.

Whale Sightings in Lake Ontario off the Beaches

As reported last month, High Net Worth Individuals according to Knight Frank have not only discovered Toronto but are flensing Vancouver's story of being an HNWI gateway to pieces. 

In every category of Knowledge, Influence, Political Power, Economic Activity and Overall Global Ranking, Toronto out ranks Vancouver. Details here.

The March GTA SFD prices increased another 1.6% M/M to set a new historical record high and are 4.2% higher than last year. Compare that to Vancouver's 14.8% plunge.

Summary of Housing Price Changes for Major Canadian Cities March 2013

Toronto Single Family and Calgary Townhouse prices broke out into new record high territory and M/M sales zoomed everywhere.



VANCOUVER average single family detached prices in March 2013 ticked up for the second month in a row but remain 14.8% ($157,900) below their peak set 11 months ago in April 2012. This compares to the 2007-09 crash of 15.4% and a loss of $163,800 (Vancouver Chart). At the "low end" buyers supported condo prices (up 0.5% M/M) and townhouse prices (down 0.3% M/M). On an annual basis, Vancouver is on a sea of red (Scorecard) with sales down 13-18% Y/Y as momentum heads towards Extreme Fear on the 12 month change chart. 

Now that you have the March data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
CALGARY average detached house prices in March 2013 remained flat just below last month's record high, (Calgary Chart) but townhouse prices zoomed again up another 5.7% M/M to set a new record peak price for the second month in a row. I have added the TSX Energy Index plot to the chart to see when correlations occur with housing prices and what stands out is that for the last year, the TSX Energy Index has been on a downtrend opposite to housing. I suppose this divergence can continue as long as price momentum keeps gushing, but remember, booms can turn to bust very quickly. 

The sentiment in Calgary is the least bearish of the 3 markets polled; but notice that sentiment is shifting. 24% (up from 22%) of the survey now think Calgary SFD prices will be 20% lower in 12 months. What do you think? VOTE HERE.

EDMONTON average detached house prices in March 2013 also rallied with Calgary and added another 3.9% M/M gain (Canada Chart). Combined residential prices were up 3.5% M/M with average condo prices zooming 6.3% M/M. Townhouse prices took a hit dropping 4.9% M/M. (Scorecard). The record high SFD prices of May 2007 are now only 2.2% away on this latest surge (Plunge-O-Meter).
 
TORONTO average detached house prices for the GTA in March 2013 broke out to a new record high (Toronto Chart) and the only things holding back a continuing rally are growing inventory, slumping Y/Y sales (Scorecard) and momentum falling towards the flat line. For anyone keeping score, the gap between Vancouver and Toronto housing prices (Vancouver vs Toronto) is narrowing, and marketers should note that HNWI has fallen in love with Toronto.

Despite record busting, sentiment continues to suggest that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
OTTAWA average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In March 2013 Ottawa combined residential prices rallied another 3.3% M/M on a solid 27.7% M/M sales surge, but annually sales are down 16.4% (Scorecard).  It's been 11 months since prices peaked in Ottawa and they remain 1.6% below the highs (Plunge-O-Meter) in a well defined 2 year channel.

MONTREAL median (not average) detached house prices in March 2013 ticked up 1.9% M/M but remain in a narrow price channel 1.6% below the all time high price set in June 2012 (Canada Chart). Prices are floating on sales resistance (Scorecard) with combined residential sales 17.3% below last year. In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 7th in Canada's 10 provinces for earnings and shares an unemployment rate with Ontario of 7.7% in March.

YEE HAW

At the turn of the year I gave the trophy to Alberta as the best place to get a paycheck, and to Calgary as the best comeback in real estate. Two months later after peaking 68 months ago (June 2007), Calgary average SFD prices have broken out with a new record high price backed up by townhouse prices also busting out to new highs.

The momentum chart has Calgary SFD prices heading towards Extreme Enthusiasm territory with a Y/Y price increase at 10.3%. I have now set up a separate chart to track Calgary SFD, Townhouse and Condo average prices.

Summary of Housing Price Changes for Major Canadian Cities February 2013

Calgary and Toronto pushed average townhouse prices to new highs and SFDs in Calgary reached a new peak price not seen since June 2007.


VANCOUVER average single family detached prices in February 2013 stopped falling for the first time in ten months and ticked up 0.1% M/M but are 13.6% down Y/Y and remain 15.3% (or $163,300) below their peak set back in April 2012. This compares to the 2007-09 crash of 15.4% and a loss of $163,800 (Vancouver Chart). At the "low end" buyers stepped in and townhouse and condo apartments ticked up 1.2% and 06% M/M. Combined residential sales zoomed 33% M/M, but are down nearly 30% Y/Y even with the supply of listings down 13.2% Y/Y (Scorecard). 

Now that you have the February data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
CALGARY average detached house prices in February 2013 busted out to new highs as did townhouse prices. I have added a new dedicated Calgary Chart to track this market. Combined residential sales are up 39.1% M/M and only down 1.2% Y/Y (Scorecard). On the momentum chart, SFD prices are gushing up towards extreme enthusiasm well off the flat line of a year ago.

The sentiment in Calgary is the least bearish of the 3 markets polled; almost as many readers think prices will remain where they are as readers who think they will drop 20%. What's your opinion? VOTE HERE.

EDMONTON average detached house prices in February 2013 also rallied with Calgary and added another 0.3% M/M gain (Canada Chart). Combined residential prices were up 4.3% M/M with average condo prices zooming 7.3% M/M. Combined residential sales and inventory were both up double digits M/M but are also both down double digits Y/Y (Scorecard). The record high SFD prices of May 2007 are now only 5.9% away on this latest surge (Plunge-O-Meter).
 
TORONTO average detached house prices for the GTA in February 2013 zoomed 5.8% M/M while townhouse prices broke out to a new record high (Toronto Housing Chart). SFD prices are now only 0.4% below their April 2012 peak and the only thing holding back new highs is a growing inventory (Scorecard) and slumping momentum. The gap between Vancouver and Toronto housing prices (Vancouver vs Toronto) is narrowing.

Polled sentiment continues to suggest that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
OTTAWA average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In February 2013 Ottawa combined residential prices ticked up only 1.3% M/M on a 51.8% M/M sales surge, but sales are still down 9.4% Y/Y (Scorecard).  It's been 10 months since prices peaked in Ottawa and they remain 4.8% below the highs (Plunge-O-Meter).

MONTREAL median (not average) detached house prices in February 2013 ticked up 0.7% M/M but remain at the lower end of the price range 3.6% below the all time high price set in June 2012 (Canada Chart). Prices are floating on sales resistance (Scorecard) with combined residential sales 22.7% below last year. In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 6th in Canada's 10 provinces for earnings.

Condo Prices Heading South

Even in the most bullish Canadian markets of Calgary and Edmonton, condo prices dropped 7.9% M/M and 4% M/M (Scorecard).

Meanwhile in Vancouver and Toronto, condo prices continued descending off their peaks down 12.4% and 8.8% from the highs.

A Dec 2012 CMHC report points to: "Rising Vacancies; Increasing Supply; Reduced Rental Demand; and Low Household Formation".

Check, check, check and check. Ok, but what I don't get is the unexpected results from a quick search of Craigslist available housing rentals. On one complete day (Tues Feb 5th) there were 9 pages (9x100 listings) of rentals available in Toronto but in Vancouver there were a staggering 25 pages (25x100 listings); an almost three fold difference and yet Vancouver has less than half the population. 

Summary of Housing Price Changes for Major Canadian Cities January 2013

Canadian Condos are not the place to be if you are a seller, and Vancouver is not the place to be if you are a condo landlord.

Vancouver average single family detached prices in January 2013 dropped again for an ninth consecutive month plunge of 15.4% and a loss of $163,800 which is greater by 33% than the 2007-09 crash and the current plunge is a 92% retracement of the $177,329 gain since January 1, 2012 (Vancouver Chart). At the "low end", strata prices slipped again and townhouses are 14.3% below their July 2011 peak and condos are down 12.4% below their April 2011 peak (Scorecard). Vancouver strata units are trading at 3Q 2007 price levels and the Plunge-O-Meter predicts 2005 price levels will be seen again.

Earnings in BC held put in a new record high, but remain 3.6% below Canada, 4.7% below Ontario and 19.1% below Alberta. BC earnings failed to follow Alberta's big move up in early 2010 and has lagged the average Canadian earnings since.

Now that you have the January data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
Calgary average detached house prices in January 2013 remained flat M/M but are up 12.7% Y/Y against an inventory drop of 28.9% Y/Y. Thin inventory helps to support average Calgary house prices that are only 1.8% below the peak set five and a half years ago in July 2007 (Canada Chart). Residential sales are up 14-16% Y/Y (Scorecard) and M/M sales also returned after the December hibernation except for condo sales which dropped 6.8% M/M dragging condo prices down 7.9% M/M. But Alberta does have a major advantage; earnings remain 19% above the national trend and 24% above BC earnings and yet an average SFD in Calgary is priced at only 55% of one in Vancouver. 

The sentiment in Calgary is mixed; almost as many readers think prices will remain where they are as readers who think they will drop 20%. What's your opinion? VOTE HERE.

Edmonton average detached house prices in January 2013 also rallied with Calgary and added another 2.1% M/M gain after last month's 2.2% M/M gain (Canada Chart). Sales rebounded of course after the December distraction but so did inventory almost doubling M/M but like Calgary, listing levels remain depressed down 15.5% Y/Y (Scorecard); which is propelling prices back up to the record highs just 6% away (Plunge-O-Meter).
 
Toronto average detached house prices for the GTA in January 2013 held support with a 0.4% M/M gain (Toronto Housing Chart) while townhouse prices got a big 3.8% M/M lift and condos continued to slide with another 2.2% M/M drop (Scorecard). Toronto housing is expensive relative to Calgary (average houses are 23% more costly in Toronto) especially with the negative earnings differential. But when compared to Vancouver,Toronto is attractive. 

Polled sentiment continues to suggest that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
Ottawa average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In January 2013 Ottawa combined residential prices ticked up 1.7% M/M after the december drop o f3.8% M/M. Sales continue to evaporate with not even a positive M/M tick after the December Fest-a-Thon. Sales are down 2.6% M/M and down 12% Y/Y (Scorecard).  It's been 9 months since prices peaked in Ottawa and their housing is currently deflating at 7.92% per year (Plunge-O-Meter).

Montreal median (not average) detached house prices in January 2013 dropped another 1.1% M/M and remain at the lower end of the price range 4.3% below the all time high price set in June 2012 (Canada Chart). Prices are floating on sales resistance (Scorecard) with combined residential sales 14.9% below last year. In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 6th in Canada's 10 provinces for earnings.

Summary of Housing Price Changes for Major Canadian Cities December 2012

Calgary is indeed the contrarian market and readers on this site expressed the glass half full sentiment in the poll results.



Vancouver average single family detached prices in December 2012 dropped again for an eight month plunge of 15.1% and a loss of $160,600 which is greater by 31% than the 2007-09 crash in the same amount of time at the same velocity and the current plunge is a 91% retracement of the $177,329 gain since January 1, 2012 (Vancouver Chart). At the "low end" strata prices slipped again and townhouses are 14.1% below their July 2011 peak and condos are down 11.7% below their April 2011 peak (Scorecard). Vancouver strata units are trading at 3Q 2007 price levels and the Plunge-O-Meter predicts 2005 price levels will be seen again. 

Earnings in BC held steady below their July 2012 peak, but remain 4.1% below Canada, 4.9% below Ontario and 20.6% below Alberta. BC earnings failed to follow Alberta's big move up in early 2010 and has lagged the average Canadian earnings since.

Now that you have the December data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
Calgary average detached house prices in December 2012 moved up again with a 1.7% M/M gain ending up the year with a 9.2% Y/Y gain (Canada Chart) and are now only 1.8% below the peak that was set 65 months ago in July 2007 (Plunge-O-Meter). This sudden jump in prices over the last quarter is not being propelled by sales volumes which are down by approximately a third with the rest of Canada, so my best guess is to follow the money and in Alberta earnings are rocking to new highs (Earnings); 20% above the national trend and 26% above BC earnings and yet an average SFD in Calgary is priced at half of one in Vancouver. The sentiment in Calgary is mixed; almost as many readers think prices will remain where they are as readers think they will drop. What do you think? VOTE HERE.

Edmonton average detached house prices in December 2012 also rallied with Calgary and added another 2.2% M/M gain after last month's 2.9% M/M gain. But sales continue to trend down with combined residential sales dropping 31.2% M/M (Scorecard). Edmonton ranks third behind Vancouver (Toronto is 2nd) in dollar loss of equity as average SFD Prices remain 8.1% and $34,601 below their peak set 67 months ago in May 2007 (Plunge-O-Meter). Detached houses are trading at levels comparable to 5 years ago (Canada Chart) and the next move down could be painful. In the last great sell off from May 2007 to February 2009 (21 months), average SFD prices in Edmonton dropped 19% and nearly $79,000.
 
Toronto average detached house prices for the GTA in December 2012 remained inert after they took a beating and dropped 3.5% M/M in November (Toronto Housing Chart). Townhouse and condo prices continued dropping another 3.6% and 1.4% M/M along with double digit declines in M/M and Y/Y sales (Scorecard). During that last big sell-off into the fall of 2008, Toronto SFDs dropped at about 1% per month compared to Vancouver's 2%/mo plunge and the current break seems to be happening with a similar velocity (Vancouver vs Toronto). Polled sentiment shifted abruptly last month with a 5% surge in those who believe that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
Ottawa average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In December 2012 Ottawa combined residential prices dropped 3.8% M/M and sales were down by a third M/M in line with Canada and the year end Who Cares Celebration (Scorecard).  It's been 8 months since prices peaked in Ottawa and their housing is currently deflating at 11.2% per year (Plunge-O-Meter).

Montreal median (not average) detached house prices in December 2012 slumped 2.2% M/M and remain range bound 3.2% below the all time high price set in June 2012 (Canada Chart). Prices are floating on sales resistance (Scorecard) with combined residential Y/Y sales dropping 19% for the last 2 months. In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 7th in Canada's 10 provinces for earnings.

Summary of Housing Price Changes for Major Canadian Cities November 2012

Dramatic Sentiment Shift is Manifesting in Vancouver and Toronto. (Poll Results)



Vancouver average single family detached prices in November 2012 dropped again for a seven month plunge of 14.1% and a loss of $150,300 which is greater by 22% than the 2007-09 crash amount and the current plunge is an 85% retracement of the $177,329 gain since the beginning of the year (Vancouver Chart). At the "low end" strata prices slipped again and townhouses are 13.5% below their July 2011 peak and condos are down 9.9% below their April 2011 peak (Scorecard). Vancouver strata units are trading at 3Q & 4Q 2007 price levels and the Plunge-O-Meter predicts 2005 price levels will be seen again. 

Earnings in BC held steady just 0.7% below their July 2012 peak, but remain 3.5% below Canada, 4.2% below Ontario and 19.8% below Alberta. BC earnings failed to follow Alberta's big move up in early 2010 and has lagged average Canadian earnings since then by 3-5%.

Now that you have the November data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
Calgary average detached house prices in November 2012 ran into resistance after a 0.9% M/M uptick and after last month's 5.2% M/M surge (Canada Chart) and are now only 3.5% below the peak set over five years ago in July 2007 (Plunge-O-Meter). This sudden jump in SFD prices last month was propelled by a modest 3.7% M/M sales increase and a 10.7% M/M drop in listings but in November, sales went back to trend with a crushing 14.3% M/M drop. As a counter trend Calgary condo prices zoomed 7.1% M/M and are 21.6% higher than last year (Scorecard).

In the last precipitous decline that started in the fall of 2007 and bottomed in the early spring of 2009, Calgary shed $92,499 of equity from an average SFD in just 18 months; a boom to bust decline of 18.3%. Alberta has the highest earnings in Canada, 20% above the national trend (Earnings) and 25% above BC earnings and yet an average SFD in Calgary is priced at half of one in Vancouver.

Albertans ride a volatile boom-bust cycle and it shows up in the wild price swings of energy and real estate. The sentiment now is mixed; where do you think Calgary SFD prices will be one year hence? VOTE HERE.

Edmonton average detached house prices in November 2012 bounced 2.9% M/M after last month's 1.2% M/M price slip. But sales reverted back to trend with combined residential sales dropping 22.7% M/M almost twice that of Calgary (Scorecard). Edmonton ranks second behind Vancouver (Toronto is third) in dollar and percentage loss of equity as average SFD Prices remain 10.1% and $43,105 below their peak set 66 months ago in May 2007 (Plunge-O-Meter). Detached houses are trading at levels comparable to 5 years ago (Canada Chart) and the next move down could be painful. In the last great sell off from May 2007 to February 2009 (21 months), average SFD prices in Edmonton dropped 19% and nearly $79,000.
 
Toronto average detached house prices for the GTA in November 2012 took a beating and dropped 3.5% M/M with SFD sales dropping 18.8% M/M. (Toronto Housing Chart). Townhouse and condo prices took a dive as well dropping 2.6% and 2.5% M/M along with their double digit declines in M/M and Y/Y sales (Scorecard). During that last big sell-off into the fall of 2008, Toronto SFDs dropped at about 1% per month compared to Vancouver's 2%/mo plunge and the current break seems to be happening with the same velocity (Vancouver vs Toronto). Polled sentiment is mixed on magnitude but unified on direction. Where do you think Toronto SFD prices will be one year hence? VOTE HERE.
 
Ottawa average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In November 2012 Ottawa combined residential prices ticked up 1% M/M after last month's 1.4% M/M sell-off. Sales last month were buoyant (up 8.1% M/M) but in November they returned to the trend along with the rest of Canada and dropped 13.2% M/M (Scorecard).  It's been 7 months since prices peaked in Ottawa and their housing is currently deflating at 6.6% per year (Plunge-O-Meter).

Montreal median (not average) detached house prices in November 2012 ticked up 0.7% M/M and remains range bound 1% below the all time high price set in June 2012 (Canada Chart). Prices are floating on renewed M/M sales drops (Scorecard) with Y/Y sales dropping 18-20%. In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 7th in Canada's 10 provinces for earnings.

Vancouver's Eiffelized Real Estate Prices

Chartists who track price series love to use the elegance of the Eiffel Tower as a metaphor for the rare instances when the data series goes exponential and well above long term trend lines.

The left side of the tower is exciting and for those who can time the ultimate exhaustion and exit point. They are rewarded... well exponentially.

But the right side of the tower is where exponential decay occurs and the trip down often has the right leg breaking well below the trend that was in place prior to the exponential move up. 

When it comes to real estate (a slow asset), the right leg can stretch out much further over time as evidenced by the Japanese experience.

As the downside trip gathers momentum, the market participants lower their expectations. We already hear real estate agents advising their client sellers to list their properties for sale below the last recorded comparable sale price to insure action and increase the probability of a successful transaction. 

The fear of missing out in Vancouver is being replaced with the fear of getting stuck.

Summary of Housing Price Changes for Major Canadian Cities October 2012 

Note: I have added a new polling page to see if we can project where prices are headed. Vote Every Month



Vancouver Eiffelizes while Calgary Zooms
Bifurcation and Divergence are spotted all over the place.

Vancouver average single family detached prices in October 2012 dropped again for a six month plunge of 12.9% and a loss of of $137,300 which is greater by 12% than the 2007-09 crash amount and the current plunge is a 77% retracement of the $177,329 gain since the beginning of the year (Vancouver Chart). At the "low end" Townhouse prices dropped another 0.2% M/M and are 12.8% below their peak while Condos slipped 0.1% M/M and are down 9.9% below their peak (Scorecard). Vancouver strata units are trading at 4Q 2007 price levels and the Plunge-O-Meter predicts 2005 price levels will be seen again. 

Earnings in BC turned down (Earnings) with the latest (August) data point now being 4% below Canada, 5% below Ontario and 20% below Alberta. BC earnings failed to follow Alberta's big move up in early 2010 and has lagged average Canadian earnings since then by 3-4%. BC residents are advised to move to Newfoundland if they want to earn 8% more and pay 69% less for housing. SOURCE CMHC: The average MLS® residential price in the St. John’s CMA was $287,829 in 3Q 2012 vs Vancouver

You can swap an average house in Vancouver for 3 similar houses in Montreal (or St. John's NL) and have cash left over. An average Vancouver house increased in price by 218% (19%/year) to the April 2012 peak since December 2000. As the  Demographia table shows (Q3-2011 data), it requires 10.6 times the Vancouver median income to buy a median priced house. By my calculation (Affordability Table), it still takes 3.6 average BC incomes (ménage à quatre) to qualify for an 80% mortgage on an average SFD here in Vancouver. 

Where do you think Vancouver SFD prices are headed? Vote Here.
 
Calgary average detached house prices in October 2012 zoomed 5.2% M/M (Canada Chart) and are now only 2.6% below the peak set over five years ago in July 2007 (Plunge-O-Meter). This sudden jump in SFD prices was propelled by a 3.7% M/M sales increase and a 10.7% M/M drop in listings but it did not bull the townhouse sector which dropped in average price by 2.4% M/M on an increase in sales by 4.8% M/M. Condos got marked up only 1.2% M/M in price against a 1.4% M/M drop in sales (Scorecard). This divergence between price and sales momentum could be short lived as market participants digest all the global influences streaming in that will affect the oil patch. "U.S. oil production is on the rise, according to the U.S. Energy Information Administration, and imports have fallen below 45 percent for the first time in more than 30 years." SOURCE David Biello November 7, 2012 ScientificAmerican.com and "Beijing has finally become serious about rebalancing China’s economy, and rebalancing means shifting Chinese growth away from being disproportionately commodity intensive." See Michael Pettis' essay: "By 2015 hard commodity prices will have collapsed."

In the last precipitous decline that started in the fall of 2007 and bottomed in the early spring of 2009, Calgary shed $92,499 of equity from an average SFD in just 18 months; a boom to bust decline of 18.3%. Alberta has the highest earnings in Canada, 20% above the national trend (Earnings) and 25% above BC earnings and yet an average SFD in Calgary is priced at half of one in Vancouver.

Where do you think Calgary SFD prices are headed? Vote Here.  

Edmonton average detached house prices in October 2012 dropped another 1.2% M/M even with a surge in M/M sales (Scorecard). Edmonton ranks second behind Vancouver in dollar and percentage loss of equity as average SFD Prices remain 12.7% and $53,967 below their peak set 65 months ago in May 2007 (Plunge-O-Meter). Detached houses are trading at levels comparable to 5 years ago (Canada Chart) and the next move down could be painful. In the last great sell off from May 2007 to February 2009 (21 months), average SFD prices in Edmonton dropped 19% and nearly $79,000.
 
Toronto average detached house prices for the GTA in October 2012 ticked up 0.6% M/M on a divergent surge of 16.9% M/M sales increase while average condo prices in the GTA slumped 3% M/M on an 18% M/M sales boom (Toronto Housing Chart). Only townhouse prices matched the sales enthusiasm with prices up 3.5% M/M and sales up 15.3% M/M (Scorecard). The energetic rally in price is put in perspective with this new single chart comparison to the titan of price that is Vancouver.

Where do you think Toronto SFD prices are headed? Vote Here. 
 
Ottawa average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In October 2012 Ottawa combined residential prices sold off 1.4% M/M on buoyant sales up 8.1% M/M but fading against sales rising only 1% Y/Y (Scorecard).  It's been 6 months since prices peaked and Ottawa's real estate is currently deflating at 9.6% per year (Plunge-O-Meter).

Montreal median (not average) detached house prices in October 2012 dropped 1.8% M/M (for the second time in 4 months) off their all time high price originally set in June 2012 (Canada Chart). The data points have been June $280,000, July $275,000, August $280,000, September $280,000 and October $275,000. Really Montreal? Is your housing market so controlled that sales data always ends in nice round numbers? Will the recent duet of Mayoral resignations (Montreal and Laval) over allegations of corrupt relationships and broken fiduciaries in the construction industry lead to better data reporting? Whatever. Prices dropped on high M/M sales (Scorecard) as they did in Ottawa and Vancouver, so we will take the data as it comes. In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 7th in Canada's 10 provinces for earnings.

Vancouver vs Toronto

In my last interview on BNN Sept 17, 2012 I was remiss in answering a specific question about the Toronto Condo market; I lazily responded to the question with a "I don't really cover Toronto Condos, but I hear anecdotally that... blah blah blah". 

Huh? First of all I do cover Toronto Condos in my Scorecard every month, but Andy Bells' question woke me up to the growing anxiety of Toronto Condo Owners and they deserve their own chart at the very least from a population basis.

Although Toronto and Vancouver are growing at similar census rates of over 9% Y/Y, Toronto has 2.4 times more inhabitants than Vancouver (5.6 mil vs 2.3 mil). So this month I have launched two new charts: a dedicated Toronto Housing Price Chart and a Comparison of Vancouver and Toronto Housing Prices with some notation of the differences.

Summary of Housing Price Changes for Major Canadian Cities September 2012 

Note: I have added two new charts this month:  A dedicated Toronto Housing Price Chart and a Comparison of Vancouver and Toronto Housing Prices.

Vancouver average single family detached prices in September 2012 dropped again for a five month plunge of 12.1% and a loss of of $129,200 which is a 73% retracement of the $177,329 gain since the beginning of the year (Vancouver Chart). This compares dramatically to the panic correction into March 2009 when the sell off was 16% (average price down $122,900) over 8 months. History is proving poetic. At the "low end" Townhouse prices dropped another 0.8% M/M while Condos slipped 0.4% M/M (Scorecard). Vancouver strata units are trading at 2007-08 price levels. The Plunge-O-Meter predicts 2005 price levels will be seen again, others do as well. The perfect storm is brewing as inventory swells by over 30% M/M in all housing classes with sales continuing to plunge over 30% Y/Y.

You can swap an average house in Vancouver for 3 similar houses in Montreal and have cash left over. An average Vancouver house increased in price by 218% (19%/year) to the April 2012 peak since December 2000 while earnings in BC remain trapped (-3.3%) below the national average (Earnings). As the  Demographia table shows (Q3-2011 data), it requires 10.6 times the Vancouver median income to buy a median priced house. By my calculation (Table), it still takes 3.6 average BC incomes (ménage à quatre) to qualify for an 80% mortgage on an average SFD here in Vancouver. 
 
Calgary average detached house prices in September 2012 dropped 1.5% M/M (Canada Chart) and are 7.4% below the peak set over five years ago in July 2007 (Plunge-O-Meter) when the warning showed up in the Gold to Real Estate Ratio (Ratios Chart) rising in the summer of 2007 as the Smart Money got out of real estate and moved into gold and oil. In the last precipitous decline that started in the fall of 2007 and bottomed in the early spring of 2009, Calgary shed $92,499 of equity from an average SFD in just 18 months; a boom to bust decline of 18.3%. Alberta has the highest earnings in Canada, 21% above the national trend (Earnings) and 25% above BC earnings and yet an average SFD in Calgary is priced at half of one in Vancouver.  

Edmonton average detached house prices in September 2012 dropped 2% M/M with double digit drops in M/M sales (Scorecard). Edmonton ranks second behind Vancouver in percentage loss of equity as average SFD Prices remain 11.6% below their peak set 64 months ago (Plunge-O-Meter) in May 2007. Detached houses are trading at levels comparable to 5 years ago (Canada Chart) and the next move down could be painful. In the last great sell off from May 2007 to February 2009 (21 months), average SFD prices in Edmonton dropped 19% and nearly $79,000. SFD prices are already down $49,350 on average.
 
Toronto average detached house prices for the GTA in September 2012 zoomed 3.3% M/M (Canada Chart) while average condos in the GTA rallied hard and put in a 6.6% M/M price gain to set an all time record price (Toronto Housing Chart). Sales continued to erode throughout the month while combined residential listings rose 13.5% M/M and 15% Y/Y (Scorecard). The energetic rally in price is put in perspective with this new single chart comparison to the titan of price that is Vancouver.
 
Ottawa average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In September 2012 Ottawa combined residential prices picked up 1.3% M/M against sales dropping 13% M/M and 17.4% Y/Y (Scorecard).  It's been 5 months since prices peaked and Ottawa's real estate is currently deflating at 8.2% per year (Plunge-O-Meter).

Montreal median detached house prices in September 2012 remained unchanged at their all time high price originally set in June 2012 (Canada Chart) while combined residential sales dropped another 4.1% M/M and condo sales dropped 4.2% M/M (Scorecard). The vanishing sales exposes the ardor of the late to the party buyers and according to the the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec now ranks 7th in Canada's 10 provinces for earnings.

The Chickens are Coming Home to Roost.

That second or third condo you bought after standing in line with the herd, or the big house with the lucky address you agreed to bid over the top for in the bidding war is now looking like an unlucky (dead) albatross around your neck.

Now you are faced with the tedium of having to do the math and make the tough decision. 

Do you cut and run with whatever is left of your equity or stick around and subsidize the negative yield and for how long? 

Suddenly cash in a savings account looks good to you when compared to the vigorish you are obliged to pay.

Summary of Housing Price Changes for Major Canadian Cities August 2012 

Note: 4 years ago (July 2008), oil peaked and then the 40 month real estate rally crashed. During the crash Gold and 'Real Rates' rallied. After the crash ended in the pit of gloom (March 2009), another real estate rally emerged and it climbed the wall of worry for 39 months before it too expired in April 2012. Let' see if gold and real rates rally again; they seem to have put in a near term bottom. 

Vancouver average single family detached prices in August 2012 dropped again for a four month plunge of 11.5% and a loss of of $122,700 which is a 69% retracement of the $177,329 gain since the beginning of the year (Vancouver Chart). Townhouses dropped another 1.4% M/M in average price while condos slipped 1.1% M/M (Scorecard). Vancouver Strata units are trading at 2007-08 price levels. The Plunge-O-Meter predicts 2005 price levels will be seen again, others do as well.

You can swap an average house in Vancouver for 3 similar houses in Montreal and have cash left over. An average Vancouver house increased in price by 218% (19%/year) to the April 2012 peak since December 2000 while earnings in BC remain trapped (-2.7%) below the national average (Earnings). As the  Demographia table shows (Q3-2011 data), it requires 10.6 times the Vancouver median income to buy a median priced house. By my calculation (Table), it still takes 3.6 average BC incomes (ménage à quatre) to qualify for an 80% mortgage on an average SFD here in Vancouver. 
 
Calgary average detached house prices in August 2012 dropped 0.7% M/M (Canada Chart) and are 6.1% below the peak set 5 years ago in July 2007 (Plunge-O-Meter) when the warning showed up in the Gold to Real Estate Ratio (Ratios Chart) rising in the summer of 2007 as the Smart Money got out of real estate and moved into gold and oil. In the last precipitous decline that started in the fall of 2007 and bottomed in the early spring of 2009, Calgary shed $92,499 of equity from an average SFD in just 18 months; a boom to bust decline of 18.3%. Alberta has the highest earnings in Canada, 19% above the national trend (Earnings).  

Edmonton average detached house prices in August 2012 remained flat ($60 more) M/M on double digit drops in M/M and Y/Y sales  (Scorecard). Edmonton ranks second behind Vancouver in percentage loss of equity as average SFD Prices remain 9.8% below their peak set 63 months ago (Plunge-O-Meter) in May 2007. Detached houses trade at levels comparable to 5 years ago (Canada Chart) and the next move down could be painful. In the last great sell off from May 2007 to February 2009 (21 months), average SFD prices in Edmonton dropped 19% and nearly $79,000. 
 
Toronto average detached house prices for the GTA in August 2012 ticked up 1.2% M/M (Canada Chart) but sales continue to plunge double digit M/M and Y/Y (Scorecard). Note: Toronto Data on the chart are average Single Family Detached Dwelling prices in the GTA since March 2009 (when the TREB began reporting GTA SFD). Prior to March 2009, the data are average combined residential prices in the GTA PLUS 24.5% which is the average percentage difference between combined residential and SFD over 24 months from March 2009 through February 2011.
 
Ottawa average detached house prices are not available, instead the chart on this site reflects Ottawa's average combined residential prices. OREB's report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In August 2012 Ottawa combined residential prices picked up 2.8% M/M against sales plunging 16.5% M/M and 14.1% Y/Y (Scorecard). The Ottawa employer, the Federal Government, tinkers away on the goal of endlessly rising prices, rather than productivity; their current (BoC) target is to have CPI increase at 2%/yr, and the CPI print for July 2012 was another 1.5%. With the target achieved and the balance of trade in deficit, a rising BoC rate seem unlikely and lenders agree as the retail level of the 5yr fixed mortgage rate remained unchanged just 5 beeps above the floor (5.19%) set back in Dec 2010 and again in Sept 2011. Meanwhile the 10yr-less the 2yr note remained 65 bps above inversion (Yield Curve). The last time inversion occurred in 2007 after a 40 month rally in commodities and real estate, the boom turned to bust (Vancouver Chart). The rally out of March 2009 has also blown out after 39 months and Ottawa's real estate is deflating at 14% per year (Plunge-O-Meter).

Montreal median detached house prices in August 2012 ticked back up to the resistance high set in June  (Canada Chart) while combined residential sales dropped another 12.1% M/M and condo sales dropped 16.6% M/M (Scorecard). The vanishing sales exposes the ardor of the late to the party buyers and according to the the 2011 Census, Montreal added 6.4% more dwelling units despite adding only 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; they dropped 2.8% M/M and the Province of Quebec now ranks 8th in Canada's 10 provinces for earnings.