Head of Canada’s Mortgage & Housing Agency Warns Home Buyers to Question Motives of Those Saying Prices Will Rise

“They’re whistling past the graveyard and offering no analysis.”

By Stephen Punwasi, Better Dwelling:

The head of Canada’s national housing agency rang off yet another warning to homebuyers. Evan Siddall, the head of the Canada Mortgage and Housing Corporation (CMHC), warned people to question the motives of anyone that says home prices will rise in the near-term.

He does so before rattling off a list of economic pressures against the market. The tweet is self-explanatory to his primary demographic of banking and finance experts. However, it’s less so to the average millennial and homebuyer – so let’s unpack it with some data points.

Evan Siddall tweeted:

“Please question the motivation of anyone who wants you to believe prices will go up (yes, up) with our economy in slow motion, oil being given away, millions of Canadians on income support and a greater % of mortgages not being paid than we’ve seen since the Great Depression.”

And he said, when he tweeted the link for the CMHC report:

“Here’s more on our house price outlook. Some vocal real estate advisors have labelled us “panic-inducing and irresponsible,’ saying essentially that house prices don’t go down. They’re whistling past the graveyard and offering no analysis. Here’s ours. You decide.”

“With Our Economy In Slow Motion”

Canada’s economy has been slowing in growth for a few quarters, even before the pandemic. It got much worse after the economic lockdown. Stat Can reported GDP fell 2.11% in Q1 2020, when compared to the previous quarter. Pre-pandemic growth in Q4 2019 also wasn’t very impressive though, coming in at the weakest level since the 2015 oil crash. With the exception of some noise in Q2 2019, GDP growth has been trending lower since the back half of 2017. This view gets even worse if you’re looking at the issue on a per capita basis.

“Oil Being Given Away”

Oil began trading at a negative price, something a few systems didn’t even believe was possible. That is, people actually paid people to haul the value of their oil contracts away. It was a newsworthy, but relatively small blip, but the value of crude and energy products has been slipping for a while. Stat Can’s index for April fell 21.96% from the previous month. That puts the value 44.79% lower than the same month last year. Prices in this segment peaked in June 2008, and have been seeing lower and lower peaks ever since.

“Millions Of Canadians On Income Support”

Canadians use various forms of income support, but nothing highlights issues like CERB (Canada Emergency Response Benefit). The temporary emergency income support rolled out due to the pandemic had 6.7 million applicants by mid-April. At the end of May, the Canadian government estimates 8.29 million unique applicants. Considering Canada’s labour force is just 18.6 million, that’s 44.5% of them requesting emergency aid. Even if unemployment is still in the low teens, this implies a lot more people aren’t working – and quite possibly won’t have work to go back to.

“A Greater % Of Mortgages Not Being Paid Than We’ve Seen Since The Great Depression.”

Canadians are requesting relief from their mortgage payments at a breakneck speed. The CMHC itself estimates 12% of insured mortgages are currently on payment deferral, and they expect this rate to rise to 20% by September. More generally, the CBA estimates the big Canadian banks had 500,000 requests looking for mortgage payment deferral in the beginning of April. By the end of May, the handful of large banks  had approved 721,000 mortgage payment deferrals. This represents about 15% of all mortgages on their books, and that number is still climbing.

Most analysis I’ve come across saying prices will climb, now depend on excluding a large segment of people. They’ve chosen to say those impacted by recent employment events, just weren’t in the market for a home. That narrative becomes increasingly harder to buy, considering we’re now at the point where almost half of the population has demonstrated being impacted. Even if the households impacted are all low income (which they aren’t), it’s worth remembering that one person’s spending is another’s income. By Stephen Punwasi, Better Dwelling

National home sales volumes in Canada have been sliding for a few years, but this is like nothing seen in a long time. Read… Canadian Home Sales See Worst April Since 1984, Montreal And Toronto Lead Lower

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  75 comments for “Head of Canada’s Mortgage & Housing Agency Warns Home Buyers to Question Motives of Those Saying Prices Will Rise

  1. Harrold says:

    With no Chinese money being laundered into Canadian real estate, prices will inevitably crash.

    • Petunia says:

      Canadian citizenship is still for sale and there are hundreds of thousands of HK residents with Canadian passports. Canada was sold to the highest bidder right from under the noses of Canadians.

      Oh, and I forgot they keep insisting they need more immigrants, so even lower wages for Canadians, and more competition for housing.

      • Fat Chewer. says:

        Exactly the same in Oz.

        • Sit23 says:

          Same in N Z. Just waiting for foreigners to sell our houses back to us for half price. Then we sell back to them at full price on the next upturn. It has worked for every other business cycle so far.

      • Paulo says:

        Your comment would be more interesting if it was accurate. Unfortunately, it is not.

        This will explain it: From Ratul Bhuiya

        I have been inquiring about the similitudes and contrasts among Canadian and U.S. movement and I will condense data assembled from different online sources here.

        Canada and the United States have fundamentally the same as jus soli law. It is practically unequivocal; the main exemption happens when the two guardians are remote negotiators. In this manner, in the event that you need your youngsters to get citizenship, it isn’t hard as long as you can mastermind them to be conceived in the nation. You can be a perpetual inhabitant, a transitory laborer, a universal understudy, a traveler, or even an unlawful settler. The rest of this answer will concentrate on naturalization.

        Canada and the United States presently have comparable prerequisites for naturalization. In case you’re a lasting inhabitant of Canada, you have to live in Canada for a long time before you can apply for Canadian citizenship. In case you’re a perpetual occupant of the U.S., you have to live in the U.S. for a long time before you can apply for U.S. citizenship, or 3 years whenever wedded to a U.S. native. It used to be that Canada given you a chance to include time you lived in Canada before turning into a changeless occupant for half to such an extent, however this is never again evident.

        At any rate, living in either nation as a changeless occupant hanging tight for citizenship isn’t that difficult. Both Canada and the United States give their changeless occupants practically the majority of the rights and duties of natives. (The standard special cases apply: casting a ballot, pursuing position, serving on a jury, and getting an international ID.) Educational organizations can’t oppress you, and most businesses can’t either.

        So the genuine inquiry is whether it’s as difficult to get Canadian lasting living arrangement for what it’s worth to get American perpetual habitation (“green card”).

        There are three general approaches to turn into a perpetual inhabitant of Canada or the United States. You can be supported by a relative, qualify on “merit” for absence of a superior word, or be conceded shelter/haven. I’ll simply go over the initial two, since a great many people won’t qualify as outcasts or asylees. And, after its all said and done I should be brief as there are numerous cases. A full dialog of the considerable number of contrasts could without much of a stretch fill a book. (I will likewise skirt other, rarer ways to migration, for example, the S visa.)

        For family-based migration, it appears that the procedure is commonly harder for Canada than the U.S.

        The procedures and hanging tight occasions for mates and ward kids are extensively comparative for the two nations, yet on the off chance that outside Canada, you probably won’t almost certainly join your accomplice in Canada while you sit tight for their application for your changeless living arrangement to be handled, though the U.S. has the finacé and life partner visas (K-1 and K-3).

        In the event that your youngsters or grandkids are supporting you to move to Canada, the holding up time is truly long (however perhaps we shouldn’t consider that a hardship, the manner in which we would for mates) and there is an amount of 5000 new applications for every year. Then again, whenever supported by a U.S. native youngster to move to the U.S., there’s no portion and you simply need to hang tight for the standard handling time of 1-2 years.

        There are different types of relations that meet all requirements for U.S. migration yet not for Canadian movement. For instance, your kin can’t support you to move to Canada except if you’re stranded, unmarried, and under 18 years old. Be that as it may, your kin can support you to move to the U.S. on the off chance that they are a U.S. native (anyway current holding up times are over 10 years.)

        For “merit”- based movement, I would state the American procedure is more diligently.

        Most by far of individuals in this class will require sponsorship by an American manager, however the sponsorship procedure is burdensome and costs a huge number of dollars in lawful charges, such huge numbers of businesses basically won’t do it, and of those that will, by far most expect you to work for them for a couple of years before they’ll even begin the procedure.

        After the procedure is begun, you may need to hang tight years for your need date to wind up current. During this time, you ought to be consistently utilized. On the off chance that you need to change occupations, you have to discover another business additionally ready to support you for a green card, which probably won’t be simple. This is the premise of the “contracted bondage” that numerous migration commentators are discussing.

        I did state you more often than not need to work for the business first, correct? On the off chance that they have a universal branch, you can work there and afterward be moved in, however on the off chance that not, you’ll by and large need a H-1B visa. For that there’s a lottery with around a 1/3 possibility of winning for every year. A great deal of businesses won’t support these “top subject” H-1B visas along these lines – they’d need to hold the situation for you for a capricious measure of time before you can even begin working for them! A run of the mill arrangement is to get around this is to get your four year certification at an American college and fit the bill for F-1 OPT so you can begin working for a business in the U.S. while you sit tight for the H-1B lottery to come through. Along these lines, in the event that you are not kidding about moving through this course, you have to get into an American college and have the option to pay for a long time of it. When you’re a worldwide understudy, these things are something contrary to simple.

        Interestingly, for Canadian migration, talented work experience gives you focuses paying little respect to whether it was earned inside or outside Canada, and it doesn’t really need to be persistent or for a similar manager. So as far as possible your opportunity significantly less. Be that as it may, it does in a way drive you to remain in a similar calling since you don’t get the opportunity to include involvement in various callings. (Interestingly, for the U.S., you can change callings while you sit tight for your need date to end up current… I think. Be that as it may, I wonder what number of individuals have enough abilities to get boss sponsorship in two unique callings?)

        Canadian colleges and outside colleges are dealt with the equivalent (no distinction in focuses). (Be that as it may, going to college in Canada will enable you to build up your English or French talking aptitudes, which can enable you to win more focuses.)

        In spite of the fact that you additionally get additional focuses whenever supported by a Canadian boss, numerous individuals needn’t bother with this, for instance my folks. To move to the U.S. without a business sponsorship, you by and large must be extremely capable, or have a large portion of a million dollars to contribute.

        In principle, you can move to the U.S. on the off chance that you are in an untalented calling, though you aren’t going to have the option to get enough focuses for Canada. By and by, you can’t (have a go at finding a business that will support you).

        I read that around 2/3 of settlers to the U.S. are family-based outsiders, with a large portion of the parity being boss supported; for Canada it’s the a different way/and 2/3. On the off chance that this is valid, it’s not amazing given the relative “trouble” levels.

        • Paulo says:

          As for the crack about low Canadian wages, they are actually much higher than US wages for most workers, mostly because of union participation. In fact, our minimum wage in BC was just raised today, to $14.60 per hour.

          Teachers earn at least 25-30% more in Bc than in WA State
          Trades earn much more. etc etc etc.

          Plus, our medical does not cost our citizens for procedures or co-pays. Better outcomes for 50% of what is spent compared to US. What is that worth to a wage earner?

        • Petunia says:

          None of this refutes the fact that you can buy residency in Canada and even citizenship with money. Every province has programs that allow investments or just net worth to get residency. Look it up.

          I have often heard that Canada wants to let in 500K immigrants a year, with a population of ~30M, that’s a lot of immigration.

          My comment about wages, which you think is a crack, was meant to refer to that fact that Canadian wages, on average, haven’t kept up with the price of Canadian housing. It is a problem well discussed over the last few years. You yourself have commented on the crazy prices in Vancouver.

          As for the shortcomings of America, we sell our citizenship as well. Our wages have also fallen in respect to housing costs, although not as badly as in Canada. Our healthcare system is an abomination. But so far, you guys are winning the crazy taxation system award. I saw a utility bill for about C$12 of gas with taxes over C$100, just nuts.

        • Augusto says:

          Paulo, I was wondering who is this “Ratul Bhuiya” that you quoted so extensively, so I did a little research. I found him on Quora where he has posted some 60 Questions and Answers, including the answer you noted above. Amongst the 60 some topics on his Quora “page” include: “What Are Some Ideal Gifts Ideas to Amaze Your Love”, “Can We Simulate Space on Earth”, “How Can You Display Categories On The Home Page of Your Magento E-Commerce Site, and my favorite, “What Is A Texas Title Loan” (always wanted to know that ). There is a picture of him and he looks “young” (20 might be generous, if its even Ratul himself). Not sure what his qualifications are to pontificate on Immigration to Canada, but he has clearly taken in a few (he has 13 followers, 14 if we include you). Perhaps he is a genius with a wide range of knowledge, clearly too much for me to comprehend, but since I wouldn’t vouch for his Choice of Presents or Dating Tips, I’m not sure I would recommend him for Advice on Immigration to Canada (or the US or Antiqua, or Cyprus or Bulgaria…all of which he knows about along with “What to Experience in Eindhoven, Netherlands”, no doubt while waiting for that Immigration Ship to Come In. Too funny.

        • dr spock says:

          Paulo, China has set up house keeping in your own backyard and you don’t know it. Canada’s Current Account Balance as a percent of its GDP has been over 3% negative for the last 12 years when it went negative and made a straight line over the cliff.

        • Augusto says:

          Paulo, As to your comments of a “worker’s paradise” in BC, a couple of small notes. First in WA they are paid in USD’s which right now is about 1.40 to the Canadian Peso. So that there increase in the Minnie Wage, don’t look so good after all, and not really a living wage anyways. Of course, the NDP government does make sure the Unions get lots, for doing very little, which is why there are so many Union Shills (know any?) and why other peoples taxes and the cost of living are so extremely high in BC (especially for those Minnie’s who still have a job after this pandemic). As to Health Care, its nirvana, wonderful and cheap in Canada, that is if you don’t die while waiting to get help-we ration with the Queue while the Americans ration with the $’s.

        • Javert Chip says:


          Petunia wins both salary arguments:

          1) BC minimum wage is indeed just now rising to $15.20/hr – however, that’s Canadian dollars, which equals $11.25 US; Washington State minimum wage is $13.50 US.

          2) Google shows median BC teacher salary at $81,500 (Canadian), which is $60,300 US; that’s almost exactly the average Washington State teacher salary.

          3) You have wisely avoided the “buying citizenship” argument.

          You have made the fatal mistake of bringing Canadian dollars to a US dollar argument.

        • timbers says:

          Petunia is logically correct. 1). US citizenship is for sale, even if what your research shows. I know Brasilains who have paid tens of thousands for a “fake” marriage to an American. Once married for required time they get green card and on to citizenship and then end the fake marriage. 2). Petunia didn’t compare Canadian wages to US, as you imply. Both treat it as strictly business. Petunia also said immigration reduces Canadian wages, but nothing regarding how they compare to US.

        • nick kelly says:

          Spock et al: Canada’s debt is closing in on one trillion dollars. US is 25 trillion. Even allowing for currency, US is substantially more indebted per person and it’s growing faster.

        • kam says:


          1. C$14.60 equals $10.65USD. and at an annualized rate, bumping up the minimum wage means more tax revenue from the working poor, for government to pay for high government employee wages.

          2. Employer taxes – Canada pension, Unemployment Insurance, Statutory Holiday Pay and Worker’s Comp. payments rise with the increase, causing, at the margin, a reduction in employment.

          3. Capital replaces labor. Sad, perhaps, but true.

          4. C$14.60 per hour is about C$ 30,000 per year. Federal tax is $2049, B.C. tax is $870, CPP/EI is $1865 for total taxes of C$4784, leaving net income of C$25,216. Which is C$12.26 or the U.S. equivalent of $8.95 USD per hour.

          5. The employer also pays about C$2100 CPP/EI plus, say $400 more of WCB on top of the C$30,000 minimum wage. And there is about 5% more that an employer has to pay for all the paid holidays in Canada. So, for about C$17/hour cost an employer gets to pay C$12 net to an employee.

          Canada’s minimum wage increases are more of a marketing message, the working poor are just tax mules for the government. The government is giving itself a raise.

      • MCH says:

        Don’t forget the hundreds of thousands of Americans who swore up and down that they’d move to Canada when the other side got to the White House. Then promptly shut their trap because oops, they didn’t really mean it.

        That would significantly help Canada increase its educated population… or not.

        • Zantetsu says:

          When George W. Bush was on the verge of being re-elected in 2004 I said that I’d leave the country if he was re-elected. He was re-elected. It took some time to set up but I moved on Jan. 4, 2007 to New Zealand. It was directly in response to his re-election.

          Unfortunately I decided to move back in 2009 after Obama was elected. Kinda wish I’d stayed in New Zealand.

          If I didn’t have kids and an ex-wife keeping me locked to the SF Bay Area you’d better believe I’d have moved to Canada after Trump was elected, if they’d have taken me (only got into NZ because ex-wife is a doctor, which NZ wanted badly).

          Some people do follow through.

        • nick kelly says:

          As I’ve said before: what on earth makes you think you can just move to Canada? I assume you mean permanently.
          Check with Canada Immigration for a wake- up.

          I personally know two who failed. Last time someone yacked about upping stakes for Canada, a frequent commenter: NVietVet, told them he had tried.

          I believe much the same difficulty applies to a Canadian wanting to move to the US, but about that I have no certain specific knowledge so I’m not going to pretend I do.

        • MCH says:

          Yet that’s not stopping countless Americans from declaring that they want to move up to Canada and leave the ****hole south of the Canadian border the second they see something they don’t like.

          Only to find out that indeed, Canada doesn’t want just a bunch of freeloading whiners either.

          People move to various places for good reasons, but moving out of spite seem to be a very stupid reason.. at least in my view.

        • Zantetsu says:

          Then MCH I recommend you stay where you are and continue criticizing others, if that’s what makes you happiest.

        • MCH says:

          Well, Zantetsu, I wouldn’t criticize you for actually having the balls to follow your convictions and actually followed through with your words.

          In fact, I applaud you for it, it puts you above most of the other whiners who couldn’t take a stand when the chips were down. You didn’t fold, good for you. But don’t you think it’s a bit strange that you yo-yoed back and forth because of who happened to be running a country at the moment.

          And did I read that right, you got into NZ because of your ex, didn’t quite have what it took to get there yourself? Well, hey, you managed it, that’s all that counts. As the man said… “whatever it takes.”

      • Nicko2 says:

        Petunia, I’ve long excused your cynicism as a product of your environment and descent into economic fragility… you are in Florida after all. Regardless, Canada ranks as the most educated country on the planet, we attract the world’s best and brightest, a vast majority recognize multiculturalism makes us all stronger, our cities thrive, cultivating excellence, safety, and progressive policies — all buttressed on the credo of peace, order, and good governance. As a country on the global state, we are ascendant.

        Canada will continue having no problem attracting migrants, and being a safe haven for the world’s wealth and knowledge.

        • Willy Winky says:

          I am Canadian by birth but left in the early 90’s.

          When I decided to leave Asia having lived and done business there for a couple of decades Canada did not even come up on the radar.

          Sorry but -30 and 8 months of winter just do not do it for me.

          Much prefer New Zealand where I have lived for 5 years now.

          And btw, it is possible to buy citizenship in most countries – including Canada, the USA and New Zealand.

          However it will cost you millions of dollars — and you still have to meet the minimum requirements to get a passport (generally you MUST reside in the country for a total of 3 of your first 5 years and you cannot leave for more than 8 months out of any one year).

          You also need to show where you made that money (often very difficult for Mainland Chinese according to a mate who is an immigration consultant) and be in good health.

          Don’t expect Canada to be overrun by investor immigrants ‘buying passports’ anytime soon.

        • Raging Ranter says:

          You posted that at 6:08 a.m.? We have a serious drinking problem too apparently.

        • kam says:


          You must be from the part of Canada that lives handsomely from the Canadian tax mules.

          Or a card carrying member of the Government Quota Club.

          Canada’s largest cities are unaffordable to most Canadians.

      • Dave says:


        What you say about Canada is exactly the same for any maturing western ciuntry including the US. The US has always been for sale to the hiest bidder!

        • Dave says:

          Sorry about the typos :-)

        • Willy Winky says:

          Consider the countries with immigration policies that allow hundreds of thousands of completely unqualified people in who are unlikely to ever buy into the culture and will struggle to find a job.

          Places like Sweden only need so many taxi drivers who can barely speak English and get a little too excited when they see a woman wearing shorts and a t-shirt.

          Alternatively, in New Zealand, very few unqualified people are allowed into the country. And if you want to ‘buy’ citizenship, the cost is currently NZD10,000,000.

          I’m thinking the NZ immigration policy makes a lot of sense and I think there should be no limit on the number of people allowed in who are willing to drop 10M into the economy.

          I’ll take 100,000 investors vs 100,000 wanna be taxi drivers.

          Unfortunately (unlike Sweden) we won’t be overrun anytime soon…. for obvious reasons.

    • Trinacria says:

      Well…I think it’s time for SoCaljay to get up to Canada, get some of his “famous” boots on the ground and publish his findings…I have a feeling those findings will be as follows: buy now or forever hold your peace…LOL

  2. Joe says:

    Organised Real Estate, Mayors and city counsellors will tell you that it never falls…
    The broke Canadian consumers have no more money and millions are laid off with no future income will be different this time around.

    • Joe says:

      Toronto Mayor was shaking his hands in anticipation of the federal government bailout…
      What he got was an advance on promised money that is currently coming to them. So far he is in debt by 1.5 billion since this Pandemic has started and was anticipating full speed ahead.
      Looks like a big crash and burn now.

  3. Phoenix_Ikki says:

    Meanwhile in Murica…the message is almost opposite of this…get in while the action is hot…local markets are hot and bidding wars are here to stay. For every article you read warning you about a potential decline in prices to come, there’s 3-5 more telling you all is peachy. Where’s our housing and mortgage agency message in all of this? If that message is NAR…then oh boy…

    • Portia says:

      The U.S. no longer has a real Market or economy that is understandable under the old “rules”, IMHO. Rumor rules.

      • Javert Chip says:

        Oh yea?

        Go out tomorrow and start a rumor that you’re fabulously wealthy.

        Write to tell us how it worked out or you find work, whichever happens first.

      • Willy Winky says:

        Not quite.

        What you have to do is convince people that a business model that involves buying $100 bills for $100 each – then selling them for $75 in ever increasing volumes — and that once you eliminate the competition you will corner the market on $100 bills and therefore be able to sell huge volumes of them for $120 each.

        But before anyone gets into this business, I suggest you first study WeWork, Tesla, Uber, and various other Unicorns.

        I also recommend that you familiarize yourself with Softbank and connect with the CEO on Linkedin because you will need many billions of dollars in funding to execute this business plan.

        It should not be too difficult to convince Masayoshi Son that this is a very scalable business… demand for your $75 hundred dollar bills will be … immense.

  4. Tim says:

    Hi Stephen

    Thank you for this article.

    I guess what you’re pointing towards is volume. Not just difficulties in this city here or that city there. Now, possibly, there is going to be proportion of those applicants who are gaming the system. I don’t know, how robust are the application procedures for mortgage deferrals in Canada?

    Now, I guess, that proportion is at present unknowable. But if only half are genuine, where does that leave the real estate market in November 2020 -March 2021?

    Is there any data yet available about distress concentration geographically, and per area, across different sectors of the market?

    What do you think?

  5. Fred Flintstone says:

    I have no idea how real estate numbers are created or how other markets are doing…….in my area……Vancouver WA, a suburb of Portland Or, prices are continuing to increase and sales are hot. Most all homes, except those that have issues like a busy road adjacent, are moving up. No construction means whoever wants to buy is looking at a small number of listings. Most sellers are waiting since no one wants people going thru their home to look with the disease. I’ve counted 9 homes sold for good prices in the past two months within 4 blocks of my home. Only one home sitting.

  6. a guy from Toronto says:

    “They’ve chosen to say those impacted by recent employment events, just weren’t in the market for a home. ”

    Because Canadian properties are not for working canadians, but for foreign “investors” that are buying Canadian passport and speculators like AirBNB owners that are taking interest only mortgages.

    It makes a perfect sense.

    • MC01 says:

      Interest-only mortgages, like all loans of the same kind, are not for everybody.
      As a first thing they require a high or even very high credit score, large down payments (over 20%), low income-to-debt ratio and/or ample assets to serve as collaterals.
      Second thing is rates are fixed only for a short spell: usually 2-5 years. After that rates are variable. And after a further 2-5 years it’s time to deal with the principal.

      Banks around here are very hot on “French Type” loans, meaning you get to pay fixed interests only for two/three years and then you start paying the principal off. As the economic situation worsens, banks are becoming very aggressive pushing these loans as a form of “economic relief”, but are having very serious problems pushing them through.
      Even assuming in two/three years we are back at pre-crisis levels, we’ll have the big principal payments to deal by them… on top of whatever payments we are already making.
      It’s basically a game of kicking the can down the road: interest rates may be at all time lows but principals are at all time-high.

      Regarding foreigners. Right now everybody is playing this game because it’s so much fun. For example Greece is making a scene to try and prevent Italians from entering the country with their euro to vacation in Santorini and Crete for purely political reasons.
      Let’s see how long they can hold on without those euro.
      Canada is the same thing: let’s see how long the massively overpirced real estate markets of (let’s name them) Montréal, Toronto and Vancouver can hold without foreign buyers, and with them the local supercharged economies.
      Granted, those foreign buyers were “only” 10-12% of those pre-crisis markets, but they tend to buy high end properties and, much more critically, can be used to push locals into doing crazy financial stuff with the justification “buy now or be priced out forever”.

  7. Fat Chewer. says:

    “Money, money, money,
    must be funny, in a rich man’s world.”

    • Joe says:

      Now you’ve done it…have the damn song stuck in my head.

      • Fat Chewer. says:

        Lol. Sorry! It suddenly popped into my head when I was reading about property prices going up while the ship is going down.

    • MC01 says:

      Correct me if I am wrong but I seem to recall that song is about a woman who struggles to make ends meet despite her hard work and hence fantasizes about marrying a rich man.
      Cannot record something like that for a major these days anymore, just like The Contours’ great “First I Look At The Purse”.

      Mercifully there are plenty of great labels around these days, no more need for majors. ;-)

  8. Michael Gorback says:

    Well here in Texas property values always increase.

    We don’t have an income tax, just sales and property taxes. According to the county, my house appreciated 20% since I bought it 14 months ago. And that’s without any Chinese buyers!

    This is the underhanded way Texas increases taxes. They inflate the appraisal, but hey look how much the value of your house went up! Until you go to sell it.

    I researched comp sales and argued that the value has actually dropped. I pointed out that driving 0.2 miles from the entrance to the neighborhood to my house there are 4 houses for sale. Last year they were snatched up in a week or two. Now they’re just sitting there.

    The county came back and offered me a 1% valuation increase. So now my house isn’t even keeping up with inflation. ;-)

    Just can’t win.

    • Anthony A. says:

      Yeah, my property value just went down 10% this year and a neighbor’s house (same floor plan, same square feet) just went up 10%. This is near Houston, Texas. He’s going to appeal, I am keeping my mouth shut! LOL

      • Kentucky says:

        Everyone’s self-interests are what perpetuate most systemic problems. Until, we as neighbors and fellow citizens, make hard and inconvenient choices, our society will not get better. Our self-interest is the price we pay for who we are.

  9. Cobalt Programmer says:

    Any speculative property prices will meet with boom or bust eventually. Once upon a time, food was subjected to such hoarding, prices rice and fall but democratic governments imposed the price control order. Later gold, medicines, oil and stocks. Now, its the houses. They are not homes. No body “lives” there (its a motel AirBnb). Only solution is, government should impose one family one home rule. A family’s head can have only one residential property. No vacation cabins, florida condo, second home and rental property. No Flippin, slippin, boxin, maxin. Just you got one home. Thats it.

    • Bobby Dents says:

      Learn the degrowth movement. It’s where all the socialists went after the materialistic fall in the 70’s. Capitalism is a shell with no future. It’s part of the reason “price controls” exist. From a place of weakness .

      And no, nobody you hear in msm is a socialist or understands the history since 1750.

    • Portia says:

      “A family’s head can have only one residential property”

      That looks like a loophole right there. ;-)

    • Bill from Australia says:

      What a wonderful Socialist idea, comrade.

  10. Augusto says:

    I thought for once a government entity was telling Canadians the truth or at least part of it. The truth is our investment climate is horrible, job opportunities minimal, including for newcomers, and much of our government anti-business. Perhaps there will be some new wave of immigration out of Hong Kong to save us, but I doubt it. This is just Magical Thinking, that mass immigration will save Canadians from themselves. As to Hong Kong, there are a lot of Hong Kong residents holding Canadian passports already, because they knew this day of the Communists taking over would come. Many of them have much of their assets in Canada already. They will leave when they have to, and they have somewhere to go-but they are thinking more about themselves and their families not Canadians looking for a free ride. As for those in Hong Kong with no money, profession or relatives in Canada, Good Luck. So, I just don’t see all this wave of free money coming that Canadian real estate agents and immigration lawyers can steal, as much as they would like to. However, it does provide an amusing BS narrative to sucker a few more clients before the big crash.

  11. Tim says:

    Hi Stephen

    Thank you for this article.

    I guess what you’re pointing towards is volume. Not just difficulties in this city here or that city there. Now, possibly, there is going to be proportion of those applicants who are gaming the system. I don’t know, how robust are the application procedures for mortgage deferrals in Canada?

    Now, I guess, that proportion is at present unknowable. But if only half are genuine, where does that leave the real estate market in November 2020 -March 2021?

    Is there any data yet available about distress concentration geographically, and per area, across different sectors of the marke

  12. MiTurn says:

    During the last RE downturn, half the homebuyers in my area (vacation-centric northern Rockies) were Canadians. And they live in the homes, not purely as investments (I suppose, any how — their cars have BC or Alberta plates). How does that work? Do they all have non-resident alien papers or can Canadians live in the US w/o special privilege? More than a few Canadian flags hung in the windows…

    • David Hall says:

      Canadian retirees from Ontario traveled to their winter homes in Florida each year. They arrived in November and returned to Canada in April. They are allowed to stay in the U.S. 180 days. They have to operate their air conditioners in their empty summer homes to avoid mold formation caused by humid weather. They pay property taxes and HOA fees.

      • David Hall says:

        Some Canadians shut their power off all summer, shut off their water and installed hurricane shutters.

  13. gorbachev says:

    Trust in fiat currency has much to do with our financial

    investment choices.You can figure out the rest.

  14. Brant Lee says:

    If it were not for the drug cartels and now, only a little worse corrupt government than to the north, I would be retiring in Mexico. If the truth be known, nearly all illegal Mexicans would rather be working and living at home. One of the most beautiful countries in the world: the climate, the shores, the food. Home prices?, LOL.

  15. Free speech says:

    Why havent hone prices come down yet? Inflation driven by central banks printing?

    And Wolf why so you not post my comments when they are counter to your articles?

    Not really fair.

    • Wolf Richter says:

      You keep signing in with different names. Each time you do, you become a new commenter, which automatically puts the comment into moderation. You also post some promos. You can’t post promos here.

  16. Rexx Rock says:

    Canada is land of tax and debt slaves.Freedom of speech is long gone,do the crime and get little time.Real estate is unaffordable because of high immigration and lax money laundering laws.Serfdom at its finest.If your young,leave Canada as fast as you can.The cost of living is very high , a weak currency with no gold reserves held by the central bank.I could go on forever how screwed up Kanadastan is.

  17. Abomb says:

    I can’t figure out why a national housing agency would be so forcefully talking down the market. Seems really off given my experience with these things in the states.

    • Wolf Richter says:

      I think they’re worried that the newly ultra-low interest rates will further lead to reckless buying and even bigger problems in the future. In other words, they’re being realistic, and they want young buyers to be realistic and not swallow all the industry hype hook, line, and sinker. This is the agency that guarantees the mortgages — so it’s the entity that will eat much of the losses of this reckless buying.

      • MCH says:

        Canada has a more interesting loan set up anyway, right? I think I learned here or from one of my Canadian colleagues about how the default mortgage is essentially an ARM.

        I think that in and of itself should be a red flag to most people, or I suppose anyone who has seen what happens when you can’t make payments. I mean a 30 year ARM with a chance of interest going above 5% (I know, I know, doesn’t seem possible) sounds like a total nightmare.

        But it’s interesting how the Canadian government actually didn’t do quite as much during the real estate bubble that pretty much lasted all of the last decade until a couple of years ago.

        • td says:

          The most common term on a Canadian mortgage is 5 years. Terms longer than that are uncommon. Outsiders are often confused by the amortization period which is usually 20 – 25 years, but you have to renegotiate every 5 years or so.

          People go from fixed rate to variable and back. When interest rates are low, as they are now, people usually renew at a fixed rate.

  18. Nicko2 says:

    Just to state the obvious, Canadian RE is still very attractive to foreign buyers due to our depressed loonie. 74 cents to the dollar? It’ll be back over 80 cents soon enough; grab it while ya can! :)

    • td says:

      The exchange rate is very much a gamble at this point. If the US economy opens up faster and manages to thrive, then the Canadian dollar is very likely to fall into the low 60’s. The opposite situation is also possible and you could see the rate back up in the 80’s. Right now, I lean towards Canada doing worse than the US.

      I worked on contract in the U.S. for several years when the exchange rate was last in the 60’s. It was very profitable since the higher American rates gave me twice the net income for a while. No good thing lasts forever, though.

  19. Dave says:

    Why grab it now, when you’ll get it cheaper in a year, maybe.

    • Jon says:

      Patience would be rewarded heavily.
      I see a lot of folks saying the prices are not going down but as I have said in this website .. reiterating.. real estate is like a titanic ship it takes lot of time to turn unlike stock market

      During last downturn in usa it took 4 years for real estate to find the bottom

      Not sure how things would turn around but I feel this time is worse than last time

      We’d see

  20. Tobi Adeoti says:

    That’s what they should do.

  21. Educated but poor Millennial says:

    SocalJim is gone for fishing!!!!
    He is not commenting on this post since he can say about his motives , he think the prices are gona go up fast!!! :D LOL

  22. Not So Fast says:

    The Federal Gov in Canada has just given away $340 Billion away in bailouts and you think this wont trickle and create hyper inflation in the future? What about the $7 trillion on the US? Inflation is a monetary phenomena – Milton Friedman.

    This will inevitably lead to real estate prices in Canada and Vancouver sky rocketing.

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