“Our in-house investment managers in NYC have a global portfolio of around $300bn USD; this was their take on Canada sent to me yesterday:
“It is reported that home sales in Vancouver and Toronto metropolitan areas dropped by 20-33% in September from a year ago. Substantial declines in home sales are usually a precursor of home price corrections. While almost all high loan-to-value mortgages in Canada have guarantees from government backed entities, a housing correction will likely impact consumer finances and aggravate credit card ABS credit performance”
Word is getting out there pretty fast now. Housing market correction = recession in Canada.”
– Toronto_CA at greaterfool.ca 7 Nov 2012 10:04am
Price follows volume. The weakness we are seeing in sales will be followed by similarly impressive price drops.
And, yes, a housing market correction will have profound effects on our economy, particularly in areas like the lower mainland where we are sorely overdependent on economic activity either directly or indirectly linked to RE.