Another illuminating chart from my partner Cory Venable here offers a look at where cyclical support may lie for the Canadian stock market (TSX) in coming months. The support band (in pink) manufactured by successive QE programs rolled out by central banks in 2010, 2011 and 2012, may prove an optical illusion as higher rates and Quantitative Tightening (QT) are now in effect. The 8500-9500 (green band) may be a more realistic downside test as this cycle mean-reverts.
A secular confluence of factors–peak debt, unaffordable prices, rising rates, tighter lending, reduced foreign flows, insufficient saving rates and aging boomers looking to downsize–are all finally working to dramatically reduce Canadian home sales from peak mania in 2017. Prices should continue to follow with a lag, and history suggests that these trends could continue for a decade and more. No one should be surprised.
Sales of luxury homes in two of Canada’s most expensive cities fell this year, as the high-end real estate market continued to feel the impact of foreign buyers taxes.
Realty brokerage Re/Max says sales of single-detached homes priced from $1 million to $2 million fell 35 percent from a year ago in both Toronto and Vancouver.
According to the annual report, released Tuesday, sales of single-detached homes in the $2-million-to-$3-million range were down 50 percent in Toronto and 22 percent in Vancouver. See Luxury home sales drop 35% in Toronto and Vancouver
One in three respondents to a new Ipsos survey conducted on behalf of insolvency trustees MNP said they are concerned that higher interest rates could force them toward bankruptcy. That was up about six per cent over a similar survey in June. Higher interest rates are already pinching the budgets of about 45 per cent of respondents and 52 per cent say they are concerned about meeting their debt payments. Here is a direct video link.
