Was April An “Air Pocket” In The Market?



Here’s a conversation that I had last week with a colleague, a Canadian Press journalist, and a client.

Same conversation; three different partners.

CMHC says that the Canadian real estate market will see a 9-18% decline in prices over the next twelve months.  My thoughts?  Comments?  Opinions?

Well, I work in Toronto.  I think that goes without saying.

As I told a reporter, “I really don’t care what’s happening to townhouse prices in Red Deer, Alberta, right now.”

If the Canadian real estate market dropped 9%, what would that mean for Toronto?  I would argue that Toronto could see anywhere from a 2% decline to a 4% gain, all things being equal, which is to say that whatever the “Canadian” market does, Toronto will substantially outpace it.

Headlines are made to draw attention, and one reading, “Canadian Prices To Drop 9-18% In Areas Other Than Vancouver, Toronto, & Montreal” just isn’t as catchy.

A client asked me on Friday, “Do you expect the market to crash more?”

Crash more?

I don’t know which word to italicize.

Crash more?  As in, the situation is that dire?

Crash more?  As in, there’s already been a crash, and it could continue even more?

Think Seinfeld, folks.

Why would Jerry bring anything?

Why would Jerry bring anything?

In any event, I explained to my client that there has not been a real estate crash, nor is one expected, at least, not here in Toronto.

More specifically, not in the central core.

More specifically than even that, not for a $1,000,000 house on the east side, which he owns.

I told the reporter that if you take “Canada” as a whole, then narrow it to “Toronto,” then you’re talking about two different things.  But if you further narrow this to “416,” then even still, you’re refining your data set.  Then narrow to “Central Core,” and I think we’re looking at a very different real estate play than merely Canadian real estate, and last but not least, if you narrow this to a 3-bed, 2-bath, semi-detached house in Leaside for $1,350,000, I will be my most-prized hockey card that this is not a piece of real estate that will be down 9% in 12 months, let alone 18.

This isn’t the Canadian Realty Blog, and I don’t sell houses in Yellowknife, Regina, Halifax, or Quebec City.  So call me biased when I say that the CMHC “prediction” is inaccurate, or at the very least, misleading.  Not intentionally, mind you.  But people in Toronto are reading this, and God only knows what conclusions they’re drawing.

There’s been a lot of talk on TRB over the past few weeks about the stock market.

I learned in my youth that there’s no point in engaging another individual in a conversation about personal investments in the stock market, because it’s just mutual masturbation.  Two people sit there and talk about how much money they made on this stock, or…



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