Full, 100% Recovery for Canada Home Price Index
"Canadian home prices in November were up 2.6% from a year earlier, according to the Teranet-National Bank National Composite House Price Index. It was the second consecutive month of prices higher than 12 months earlier, after 10 consecutive months of 12-month deflation. The reason for the turnaround is that November was the seventh straight month in which the index for Canada as a whole was up from the month before, leaving it down only 0.1% from the peak of August 2008." MP: The index for Canada home prices in November was 130.62, just slightly below the August 2008 peak of 130.79, and indicating that there has been a complete recovery for home prices in Canada.
7 Comments:
Just curious, did Canada try to speed up recovery by "stimulating growth" in their housing market using tax credits or some other temporary incentive?
Does anyone have a good article comparing the Canadian Banking system to that of the U.S.?
Specifically, how the Canadian banks missed both the 1930's and 1990's bank meltdowns that occurred in the U.S.
Bob: I've had a few posts on Canadian banks, see here, here
and here.
And no nanny-state home mortgage interest tax deduction.
The Canadian recovery suggests demand for houses were weaker than in the U.S. So, supply of houses increased at a lower rate than in the U.S. When demand fell, there wasn't a large overhang. So, prices could recover faster.
Also, using 1995 as a starting point, instead of 2004, shows Canadian real home prices fell till 2003, while U.S. real home prices rose about 40%. U.S. real home prices almost doubled from 1995 to 2006, while Canadian real home prices peaked at roughly 25% in 2008 from 1995 (later than the U.S.).
Canadian mortgages have virtually a AAA rating because the Government of Canada guarantees 90% of the mortgage in the event of default. New rules have been proposed to tighten lending standards. The link below sheds some light on the subject:
http://www.firstfoundation.ca/blog/government-guaranteed-mortgages-and-the-new-rules/
The above link demystifies
Post a Comment
<< Home