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Contents contributed and discussions participated by Susan Cui

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Susan Cui

The Daily, Thursday, May 12, 2011. New Housing Price Index - 3 views

www.statcan.gc.ca/...dq110512a-eng.htm

Housing Price Index

shared by Susan Cui on 23 May 11 - No Cached
  • The New Housing Price Index (NHPI) was unchanged in March following a 0.4% advance in February.
  • Between February and March, prices rose the most in Saint John, Fredericton and Moncton (+0.4%) followed by the metropolitan regions of Toronto and Oshawa, Winnipeg and Regina (all three registering increases of 0.3%).
  • The most significant monthly price decreases were recorded in Québec (-0.7%), Windsor (-0.6%) and Edmonton (-0.2%).
  • ...2 more annotations...
  • Year over year, the NHPI was up 1.9% in March following a 2.1% increase in February.
  • The largest year-over-year increase was observed in St. John's (+6.2%), followed closely by Regina (+6.1%). Compared with March 2010, contractors' selling prices were also higher in Winnipeg (+4.5%) as well as in Toronto and Oshawa (+3.6%). Windsor (-4.6%), London (-1.7%), Greater Sudbury and Thunder Bay (-1.3%) and Victoria (-1.2%) posted 12-month declines in March.
  • Susan Cui on 23 May 11
     
    The New Housing Price Index indicates that during the month of March, there was no change in NHPI. This was because the increase of housing prices in some metropolitan regions were offset by the decrease in housing prices in other metropolitan areas. The areas with the most significant housing price increase were Saint John, Fredericton, Moncton, metropolitan regions of Toronto, Oshawa, Winnipeg and Regina. The areas with the most housing price decrease were Quebec, Windsor and Edmonton. Increase in housing prices in some metropolitan areas were due to improving market conditions and higher material, labour, land development costs. Decrease in housing prices in other metropolitan areas were due to slower market conditions and lower land costs. Comparing to last year's NHPI in March, the NHPI went up 1.9%.
Susan Cui

Bad housing advice of the day, Philly edition | Felix Salmon - 4 views

blogs.reuters.com/...vice-of-the-day-philly-edition

Housing Price Advice Gold vs House

shared by Susan Cui on 23 May 11 - No Cached
  • house prices are falling, gold prices are rising, and therefore before you go ahead and buy a house, you should probably consider whether you’d be better off buying gold instead.
  • house prices are falling, gold prices are rising, and therefore before you go ahead and buy a house, you should probably consider whether you’d be better off buying gold instead.
  • homes are not an investment, they’re more of a consumption good.
  • ...4 more annotations...
  • Maybe you’ve saved enough for a down payment. But should you bet your money on home prices, even with a tempting low-interest, fixed-rate mortgage? Or is it financially smarter to continue renting and invest the money in an asset that could appreciate for at least another few years?
  • Being “financially smart” is not the same as investing in whichever asset gives you the highest return over some given time horizon.
  • Essentially, Arvedlund is proposing an exotic relative-value trade here: she’s saying that houses will underperform gold, or that the price of a house in gold is going to go down rather than up.
  • the price of a house in gold has gone down, and you would have been financially better off buying gold than taking that money and using it as a down-payment for a house.
Susan Cui

The Progressive Economics Forum » Housing on the knife's edge - 6 views

www.progressive-economics.ca/...ng-on-the-knife%e2%80%99s-edge

Housing Price Unstable Housing Market

shared by Susan Cui on 23 May 11 - No Cached
  • On the heels of multiple warnings from the Bank of Canada that Canadians have taken on too much household debt for comfort (we hold the dubious distinction of having the worst consumer debt to financial assets ratio among 20 OECD nations), the federal government announced
  • On the heels of multiple warnings from the Bank of Canada that Canadians have taken on too much household debt for comfort
  • the federal government announced
  • ...13 more annotations...
  • these federal changes will have the greatest effect on middle class Canadians
  • With these moves, the federal government is starting to take seriously the risk of record-high housing prices and record-high household debt.
  • It will reduce the maximum insurable amortization period from 35 years to 30 years
  • The pessimistic possibility is that trying to reign in mortgage debt and housing prices could burst the housing bubble that simultaneously exists in six Canadian cities.
  • The optimistic possibility is that reverting to pre-2006 regulations could help put a lid on house prices
  • to get back to basics and start saving again.
  • It could also force Canadians
  • Between 1980 and 2001, housing prices in four of the six major markets in Canada (Edmonton, Calgary, Ottawa and Montreal) remained in a tight band of between $150,000 and $220,000 (in today’s dollars).
  • experienced three housing price declines between them brought on by interest rate hikes.
  • Toronto and Vancouver
  • When the bubbles burst, they wiped out in the worst case more than 35% of an average house’s value
  • Today it isn’t just Toronto and Vancouver; it’s all six major Canadian cities that are outside of the safety zone.
  • Canada’s housing market is still on a knife’s edge and isn’t clear which way we’ll fall.
Susan Cui

Canadian house prices continue to rise, although April sales down - 6 views

www.montrealgazette.com/...story.html

Housing Price Falling sales Rising Prices

shared by Susan Cui on 23 May 11 - No Cached
  • Canadian home prices continued their upward march in April, driven by strong investor demand in Vancouver, while cracks in the Toronto condominium market may be starting to appear.
  • The Canadian Real Estate Association said Tuesday the average price of a home sold in April across the country was $372,544, up eight per cent from a year ago.
  • but the Ottawa-based group cautioned that the figure was skewed due to "surging multimillion dollar property sales in selected areas of Greater Vancouver."
  • ...13 more annotations...
  • slow April sales figures
  • saw activity dip 4.4 per cent from March
  • The slow sales are said to have been driven by new mortgage rules which came into affect April 19 and made it tougher to borrow.
  • Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time homebuyers. By contrast, higher end homes sales in Greater Vancouver and Toronto had their best April ever.
  • more than 50 per cent of condominiums sold in the past year were purchased by buyers who do not intend to occupy their units and plan to rent in many instances.
  • People are buying these for capital appreciation.
  • Don Lawby, chief executive of Century 21 Canada, says the housing market has been affected by foreign investors who have reacted to tougher tax rules in their home country by investing abroad.
  • They are not afraid to offer above price and they are not afraid to get into a bidding war
  • Nevertheless, Lawby says
  • these investors
  • are small and the impact on the larger market minimal.
  • while April numbers present a market with falling sales and rising prices,
  • market conditions were exaggerated by some one-time issues.
Susan Cui

Best Way to Fix Housing Market Let Prices Fall (Fast): Tech Ticker, Yahoo! Finance - 3 views

finance.yahoo.com/...-Market-Let-Prices-Fall-(Fast)

Housing Price Best way to fix

shared by Susan Cui on 23 May 11 - No Cached
  • "Fixing the housing market" is usually defined as:Stopping house prices from falling Stopping foreclosures
  • Prices. The best way to stop prices from falling is to let them fall far enough to reach equilibrium, fast.
  • Foreclosed houses are selling like hotcakes because prices are finally attractive enough to draw in new capital.
  • ...15 more annotations...
  • Un-foreclosed houses are NOT selling like hotcakes, but this is because their owners have yet faced up to the reality of how little they are worth (or, put differently, because they don't yet have to sell).
  • The vast majority of plans to "stop prices from falling" involve subsidies of one form or another (tax credits, subsidized mortgage rates, etc.)  These may slow the decline, but they won't stop it
  • subsidizing/encouraging debt-bingeing and homeownership is what got us until this mess in this first place.
  • The fastest and most effective way to stop prices from falling is to let them fall until they've reached equilibrium. And then start rebuilding wealth, equity, and economic growth from there.
  • Lots of Americans are going to lose their houses in the next few years regardless of what we do.
  • Keeping the number of foreclosures as small as possible
  • will just delay the inevitable
  • Importantly,
  • Foreclosures are caused by owners' inability to make debt payments.
  • The best way to stop foreclosures, therefore, is to get people out of houses they can't afford and into houses they CAN afford (whether by renting or buying).
  • the house-price issue
  • (No reason to buy or build now if you think prices will be cheaper tomorrow).
  • Businesses and consumers
  • open up their wallets
  • when house prices stop falling. And the fastest way to get there is to let them fall.
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