{"id":60531,"date":"2021-11-20T06:12:07","date_gmt":"2021-11-20T11:12:07","guid":{"rendered":"https:\/\/olduvai.ca\/?p=60531"},"modified":"2021-11-20T06:12:07","modified_gmt":"2021-11-20T11:12:07","slug":"the-most-splendid-housing-bubbles-in-canada-pause-after-bank-of-canada-ends-qe-starts-unwinding-its-balance-sheet","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=60531","title":{"rendered":"The Most Splendid Housing Bubbles in Canada \u201cPause\u201d after Bank of Canada Ends QE, Starts Unwinding its Balance Sheet"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2021\/11\/17\/the-most-splendid-housing-bubbles-in-canada-pause-after-bank-of-canada-ends-qe-starts-unwinding-its-balance-sheet\/\">The Most Splendid Housing Bubbles in Canada \u201cPause\u201d after Bank of Canada Ends QE, Starts Unwinding its Balance Sheet<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>Home prices fell in Vancouver, Ottawa, and Montreal; were flat in Toronto, other cities for the first time since 2019.<\/strong><\/p>\n<p>So this is something that hasn\u2019t happened in the Canadian housing market since 2019: The Teranet-National Bank House Price Index for October, released today, failed to rise from the prior month.<\/p>\n<p>The index for Vancouver, a red-hot housing market, fell for the second month in a row, something the market hasn\u2019t seen since September 2019. The indices for Ottawa and Montreal also fell. The index for Toronto was flat for the month, as were the indices for some of the other cities.<\/p>\n<p>What has changed that caused this \u201cpause,\u201d as it is now being called, in one of the biggest housing bubbles in the world?<\/p>\n<p><strong>The Bank of Canada got hawkish.<\/strong><\/p>\n<p>For a year now, the BoC has repeatedly cited the craziness in the Canadian housing market \u2013 a historic spike in home prices \u2013 the result of the BoC\u2019s crazy asset purchases and interest rate repression.<\/p>\n<p>The BoC started tapering its purchases of securities a year ago by ending its MBS purchases and tapering its purchases of Government of Canada bonds. It then shed nearly all its repos and short-term Canada Treasury bills, ended other smaller programs, and\u00a0<a href=\"https:\/\/wolfstreet.com\/2021\/07\/14\/bank-of-canada-tapers-bond-purchases-3rd-time-bank-of-new-zealand-stops-qe-cold-turkey-citing-housing-bubble-in-least-regrets-policy\/\" target=\"_blank\" rel=\"noopener\">tapered its GoC bond purchases multiple times<\/a>. Then in October, a\u00a0<a href=\"https:\/\/wolfstreet.com\/2021\/10\/27\/suddenly-hawkish-bank-of-canada-ends-qe-moves-rate-hikes-forward-1-and-2-year-yields-spike\/\" target=\"_blank\" rel=\"noopener\">suddenly hawkish Bank of Canada ended QE entirely<\/a>\u00a0and surprised markets by moving the next rate hikes forward. Meanwhile, inflation in Canada hit an 18-year high.<\/p>\n<p>Total assets on the BoC\u2019s balance sheet, as of last week, fell to C$496 billion, down 14% from the peak in March.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-75576\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2021\/11\/Canada-Bank-of-Canada-2021-11-17-total-assets.png\" sizes=\"auto, (max-width: 522px) 100vw, 522px\" srcset=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2021\/11\/Canada-Bank-of-Canada-2021-11-17-total-assets.png 522w, https:\/\/wolfstreet.com\/wp-content\/uploads\/2021\/11\/Canada-Bank-of-Canada-2021-11-17-total-assets-260x216.png 260w, https:\/\/wolfstreet.com\/wp-content\/uploads\/2021\/11\/Canada-Bank-of-Canada-2021-11-17-total-assets-160x133.png 160w\" alt=\"\" width=\"522\" height=\"433\" \/><\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Most Splendid Housing Bubbles in Canada \u201cPause\u201d after Bank of Canada Ends QE, Starts Unwinding its Balance Sheet Home prices fell in Vancouver, Ottawa, and Montreal; were flat in Toronto, other cities for the first time since 2019. So this is something that hasn\u2019t happened in the Canadian housing market since 2019: The Teranet-National [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,103,406,661,662,4254,4255],"class_list":["post-60531","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-canada","tag-housing-bubble","tag-qe","tag-quantitative-easing","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=60531"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60531\/revisions"}],"predecessor-version":[{"id":60532,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/60531\/revisions\/60532"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=60531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=60531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=60531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}