{"id":8792,"date":"2015-06-04T05:19:28","date_gmt":"2015-06-04T10:19:28","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8792"},"modified":"2015-06-04T05:19:28","modified_gmt":"2015-06-04T10:19:28","slug":"canadian-mortgage-insurer-tells-us-hedge-funds-why-canadas-housing-bubble-is-immortal-hilarity-ensues","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8792","title":{"rendered":"Canadian Mortgage Insurer Tells US Hedge Funds Why Canada\u2019s Housing Bubble Is Immortal. Hilarity Ensues"},"content":{"rendered":"

Canadian Mortgage Insurer Tells US Hedge Funds Why Canada\u2019s Housing Bubble Is Immortal. Hilarity Ensues<\/a><\/h3>\n

Home prices in Canada\u2019s two largest metro areas have been red-hot for years. In May, the average selling price for all types of homes in the Greater Toronto Area jumped 11% from a year ago to C$649,600 on a 6% increase in sales. In Greater Vancouver, the composite benchmark price for all homes rose 9.4% to C$684,400 on a 23% increase in sales.<\/p>\n

But these overall price changes paper over what\u2019s happening with detached homes,whose prices<\/a>\u00a0soared 14% to C$1,104,900 in Vancouver and 18%\u00a0to C$1,115,120 in Toronto.<\/p>\n

Already last summer, Fitch\u00a0fretted about<\/u><\/a>\u00a0overvaluation in housing and the high debt burden relative to disposable income of Canadian households. At about the same time, seven in ten mortgage lenders\u00a0expressed<\/u><\/a>\u00a0concerns in a poll by FICO that home prices were in a \u201cbubble\u201d that could burst any time. Last October, the Bank of Canada thought that the housing bubble could threaten Canada\u2019s\u00a0financial stability<\/u><\/a>.<\/p>\n

This January, Deutsche Bank\u00a0estimated<\/u><\/a>\u00a0that homes in Canada were\u00a063% overvalued. In March, the IMF\u00a0warned<\/u><\/a>\u00a0that high household debt levels and the \u201coverheated housing market\u201d are two risks it would \u201cneed to keep an eye on.\u201d In April, the\u00a0Economist<\/em>determined that home prices in Canada were overvalued by 35% when compared to incomes, and 89% when compared to rents.<\/p>\n

Now hedge funds are trying to engineer ways to short the Canadian housing market one way or the other, because surely this would be another \u201cshort of a lifetime.\u201d<\/p>\n

Maybe they\u2019re right: beyond Toronto and Vancouver, the housing market is already drifting lower.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Canadian Mortgage Insurer Tells US Hedge Funds Why Canada\u2019s Housing Bubble Is Immortal. Hilarity Ensues Home prices in Canada\u2019s two largest metro areas have been red-hot for years. In May, the average selling price for all types of homes in the Greater Toronto Area jumped 11% from a year ago to C$649,600 on a 6% […]<\/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":[1806,103,1956,1839,310,3108,2297,2340,4900,803,1340],"class_list":["post-8792","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble","tag-canada","tag-canadian-housing-market","tag-deutsche-bank","tag-fico","tag-fitch","tag-hedge-funds","tag-housing-market","tag-housing-market-bubble","tag-toronto","tag-vancouver"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8792","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=8792"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8792\/revisions"}],"predecessor-version":[{"id":8793,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8792\/revisions\/8793"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8792"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8792"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8792"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}