I find it interesting when people talk about “Canada’s housing market” as if it is one homogeneous entity. Of course when one thinks logically about the concept it seems ridiculous. How good such a massive area, with completely different geographical and economic factors, be summed up by one headline? Inevitably then, any headline that refers to “Canada’s housing market” is really talking about Toronto, maybe Vancouver and Montreal, and possibly a dash of Calgary and Edmonton thrown in. The other places really aren’t represented well at all. If it is tough to broadly describe Canada’s housing market, it’s even tougher to give generalized advice to everyone, but the question of when to enter the housing market is on a lot of people’s minds right now.
The new norm in Canada up until the end of 2012 had been homes going on the market, and then coming off of the market a week later while fetching 10-30% above the asking price. That’s a pretty incredible precedent, and realtors were able to capitalize on the momentum by saying, “Get in now before you can’t afford a home anymore. Oh, and by the way, make sure and take advantage of low mortgage rates before they’re gone too.” As we’ve seen in the months since Mr. Flaherty reversed the Conservative position on mortgage lengths and a few other housing-related pieces of regulation, this is definitely not the norm anymore right across Canada. Depending on where you live, the headlines might say that housing is holding steady, or that it is in the middle of a pretty big reversion to the mean (namely in B.C.). So how to play a deflating housing market and how low can it go? Continue Reading