“It looks, at this point, like it’s a soft landing. … The IMF said that Canadian homes are overpriced by 10%. … BMO Nesbitt Burns says that in each case after mortgage tightening it took about 7 months for the market to adjust. We’re now seven months in from Mr Flaherty’s latest move. Given 5 yr fixed mortgages below 3%, BMO says we shouldn’t be shocked if we find a floor here.”
– Michael Babad, journalist, Globe and Mail video commentary ‘Don’t be ‘shocked’ if home prices find floor again: BMO’, 15 Feb 2013
“We’ve seen the adjustment in the housing market. We think there’s a bit more to come over the next couple of years.” – Mark Carney, Governor of the BOC, quoted in G&M, 17 Feb 2013
“In a report last week, the International Monetary Fund estimated that Canadian home prices are overvalued by an average of 10 per cent and predicted an “adjustment” over the next five years.”
– from ‘More adjustment to come in home prices: Carney’, G&M, 17 Feb 2013
“The January reading suggests that the housing market may be stabilizing after the cool-down witnessed since tighter mortgage rules took effect in July 2012, writes TD’s Derek Burleton. According to the bank’s research, the impact of new mortgage insurance rules tends to wear out after six to nine months. Burleton expects this to be the case for the latest round of tightening as well, especially since a relatively healthy labour market and interest rates at historic lows should encourage home-buying.”
– from ‘Is the housing cool-down already over?’, Macleans, 15 Feb 2013
This commentator acknowledges uncertainty:
“Whether house prices fell a little in January, or a lot, sort of misses the point… the bigger issue here is how far this market will fall, and how long.” – David Berman, journalist, Globe and Mail video commentary ‘What’s ahead for the housing market?’, 17 Feb 2013
Regular readers know to anticipate cries of “it’s only a flesh wound” and premature ‘bottom calls’ from many quarters all the way through the coming price deflation.
After a run up of 200% to 300%, a 10% pullback is noise; a rounding error.
There is absolutely no way that the speculative mania in Vancouver housing will resolve itself with such a minor price pullback.