David Rosenberg: All’s fine on the Canadian homefront
It looks like the much-maligned Canadian housing market is way more resilient than those Canada-doomsayers would believe
There’s no sign of a housing collapse in Canada, Gluskin-Sheff’s chief economist says.
David Rosenberg, the latest pundit to weigh in on the hard versus soft landing debate, says Canada’s housing market has almost recouped all the losses brought on by Ottawa tightening the mortgage rules in 2012.
Last year the federal government, concerned about Canadians’ rising debt levels, cut the maximum amortization period for a government-insured mortgage to 25 years from 30 years and capped home equity loans at a maximum of 80% of a property’s value — down from 85%. Economists at the time expected the tightening to shave 10% to 20% off property prices, and cut into Canada’s GDP.
“It looks like the much-maligned Canadian housing market is way more resilient than those Canada-doomsayers would believe,” Rosenberg wrote in his morning briefing Tuesday.
The economist said existing home sales shot up “an impressive” 6.4% in the second quarter, the strongest performance since the end of 2010.
Existing home sales in June strengthened across the country, including a 6.4% leap in Vancouver, the market hardest hit by the slowdown. Even Toronto, ” a notable under performer,” saw sales climb 1%, he said.
“Bottom line: The Canadian housing market is not collapsing, but rather stabilizing after achieving the government-induced soft landing,” said Rosenberg.