The CMHC released the preliminary housing starts data for Canadian major centres for the month of November and housing starts basically dropped off a cliff across the country with Vancouver being no exception.
Starts fell from 2768 last November to 971 this November. It appears that the trend for starts is downward as we enter the correction phase of this real estate cycle. The rolling 12 months of starts has now fallen from a cycle high in July of 21,948 to 19,660 in November.
Construction unemployment is likely to start rising dramatically through 2009 if this trend continues.
Off topic but here's a good explanation of the whole mess ;)
ReplyDeleteThis Modern World (comic)
OT: Oh my god, that comic was too funny. I decree it be distributed to all 7th graders as a primer in how easily we were all led into bizarro-econo-land.
ReplyDeleteSo... the media has a new spin on the current meltdown: The biggest winners are people with variable-rate mortgages!
ReplyDeletehttp://forum.freemarkets.ca/topic.php?id=208
Wow,
ReplyDeleteTalk about the msm turning. Check out this article from Neil McDonald of the CBC about the American situation. It is entitled, "Deck the halls with boughs of fear!"
http://tinyurl.com/6dxe77
I am liking the new digs here Mo, nicely done.
or try this one from the Bank of Canada:
ReplyDeleteRisk of 'substantial' rise in home foreclosures: Bank of Canada
http://tinyurl.com/6xoxf2
Well CMHC is making money on the mortgages - for now. See what they pay to borrow money and compare with what you pay for a 5 year term:
ReplyDeleteCanada Housing Trust 2.70% 15Dec13
Short Description: Offering of Bonds
Maturity: December 15, 2013
Coupon: 2.70% per annum
Short first coupon
Price: $99.782 CDN per $100 par value.
Yield to Maturity: 2.74% semi-annual ; 2.76% annual
Settlement: December 18, 2008
I saw that bond offering today too patriotz. Un-frickin-believable - taxpayer subsidized bank profits for all.
ReplyDelete5 year bonds issued at 2.7%
5 year mortgage issued at 5.5%
Take out the bank's 1%-1.5% profit spread and voila CMHC is raking it in.
Well they'd better be raking it in. The less I have to pay in taxes to bail out the CMHC when the excrement hits the fan the better as far as I'm concerned. However I don't think a percent or two is nearly enough cushion for all the bad mortgages that are out there just waiting for this spring selling season to be a dud.
ReplyDeleteanada Mortgage and Housing Corporation (CMHC) figures indicate that housing starts across the Vancouver CMA jumped 52 per cent to 2,288 units in August, over the same month last year. Multiple housing starts accounted for most of the increase, rising 76 per cent to 1,767 units, while single detached housing starts rose 3 per cent to 521 units, compared to August of last year.The 2,288 housing starts in the Vancouver CMA last month marked the second month this year when housing starts exceeded 2,000 units...Toronto Lofts for getting more details...
ReplyDeleteBoth new home starts and existing home sales will stay near record highs, but edge down slightly in the year ahead. Look for new and resale home prices in Metro Vancouver communities to increase, but at a slower pace than in recent years..replica rolex watches
ReplyDelete