The G&M has an interesting story that, I think, while not only telling the present, also tells the future.
There are few economists working for the big dogs--the banks, the real estate associations and just about any others that have their hands in the real estate pockets of Canada--that I trust to truly tell it like it is when it comes to market predictions. I think their mandate is to report the numbers as they currently are and have recently been, then look forward and seek language in their press releases and interviews that serve to soften the blow or the hype, in the name of the economy and their major shareholders. Armed with a critical mind, and a constructive attitude though, anyone is able to figure out what they need to from the numbers and subtle suggestions these financial wizards cast, to protect themselves from the spells of the bubble(s).
I bring this last point to your attention because it want to contrast it to what Mr. Muir says about the factors leading to, what he calls, "slow[ing] to a level not seen since the beginning of the decade... BC households are now cautious about making major purchases in light of uncertainty around fuel prices and other inflationary pressures."
The slowing economy is taking its toll on household finances, driving up debt at a faster pace than incomes and assets, new analysis from CIBC World Markets shows.
In the first quarter of 2008, household debt in Canada rose almost 3 per cent but personal disposable income rose just 2 per cent, pushing the debt-to-income ratio up to 130 per cent from 122 per cent a year earlier.
At the same time, the level of assets hardly changed during the first quarter of 2008, since the stock market was correcting and house prices were levelling off.
“Canadians are seeing their net wealth position shrinking,”
Rising net worth has been an important driver of consumer activity in the past few years
“The wealth effect should not be underestimated.”
I would like it very much if someone, anyone, anyone, Bueller, Bueller, would write it down (oh wait, Merrill Lynch did): Western Canada is very much like every other housing market that has peaked and is now heading down: we are over-valued, over-building and under-selling expectations to margins not unlike other nations that experienced the same trends.
In the last post below, the old "Victoria is different, don't you know, every boomer and their immigration cousins are moving here en masse and everyone else just got 40% raises" myths crept back in to the housing correction denier's talking points.
The way I see it, is even if, and I use if here very strongly, because statistics from BCStats and StansCan do not support the claims, it wouldn't matter, because very few will want to buy RE when they know they can get it cheaper next month or next year--and the decline in sales is evidence enough for this theorist. And guess what? According to those experts with their hands in your pockets, the people, regardless of where they come from or how much they make, have started to figure it out. And now they are waiting to see what happens in the next 6 months or longer. Like us.