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  1. D

    Baby, we got a bubble!?

    A surprising statement from the IMF today. They wouldn't make this sort of recommendation casually, and I would expect they would have disclosed this and discussed with Flaherty/etc prior to publishing...
  2. D

    Baby, we got a bubble!?

    I've been away from the board for awhile. As a long time bear, I have to acknowledge that the enduring stickiness of prices & sale volumes suprises me. At the same time, from a value investing perspective my conclusions remain unchanged about the unsustainability of prices and the long term...
  3. D

    Baby, we got a bubble!?

    Graphs showing sales decreasing May to Sept are to be expected. It is a normal season variance. As a bear, I'll admit I'm surprised by the sales and price figures for August/September. No change in my expectations, but I am increasingly curious about who are these people who are buying at...
  4. D

    Baby, we got a bubble!?

    My understanding is that the procedure changed for 2013, and only 2013 data contains the double counting. Can't recall the source where I read that.
  5. D

    Baby, we got a bubble!?

    Aug 2012 sales were a decade low. Aug 2013 sales are at the average of for Augusts. Average prices up 2% above inflation (adjusted for product mix 3.7% minus inflation).
  6. D

    Baby, we got a bubble!?

    1. 1519/1483 = 102%. ie a 2% increase in sales July Mid-month Condo + Townhouse, YoY (note 1519 your figure 2013, 1483 TREB figure 2012) 2. There is no logical reason to remove the 11 sales at $1m. While the $ amount might be equal to the 3% of transactions that don't complete, that is a...
  7. D

    Baby, we got a bubble!?

    Above in bold you reference 1,518 sales (and avg condo prices of $341), but you didn't say what those sales refer to. I presume they are condos+townhouses? TREB's 2012 july mid-month data references 1481 sales, and average condo prices of $329k...
  8. D

    Baby, we got a bubble!?

    I'm curious about how the yield spike might affect end of June sales (and perhaps July as well). I'd figure someone on the fence might want to close a deal so they can use their locked in sub-3% rate, which would otherwise expire soon. But at the same time, I'd figure banks would want to...
  9. D

    Baby, we got a bubble!?

    The banks didn't choose to edge lower with rates this past spring. Their rates reflected the CAD Gov't 5-yr Treasury yield of 1.1% at that time. Similarly, they didn't choose to raise rates to 3.39% last week, but rather moved in response to the rise of the 5-yr Treasury yield to 1.8%.
  10. D

    Baby, we got a bubble!?

    There are a number of inconsistencies in your comparison of the returns of housing vs the TSX. 1. Using the time frame of 1998-2012, Toronto RE is up 3.4% annually according to TREB. The S&P/TSX including dividends is up 5.5% annually. 2. However your analysis uses a 5% RE annual return (above...
  11. D

    Baby, we got a bubble!?

    For added perspective on what is happening in our RE market, consider the following discussion on a Mortgage Broker's article about a hypothetical "dream client". Again, the author is a mortgage broker who created this hypothetical 50yr old couple as an example of what constitutes a AAA risk in...
  12. D

    Baby, we got a bubble!?

    For the majority of Canadians, their equity in their principle residence represents the majority of their net worth. They've experienced unexpected windfall gains in that equity over the past 20 years, and accordingly they've been somewhat careless in saving money to invest in other areas. So...
  13. D

    Baby, we got a bubble!?

    Every week the daily newpapers include a "financial facelift" type article in their personal finance section where an advisor reviews the retirement planning of a couple. In almost every case that I've read, the couple would suffer a serious (perhaps insurmountable) setback if their multiple RE...
  14. D

    Baby, we got a bubble!?

    I can't speak for others, but I've answered this many times. I will do so...again. Unprecedented Gov't global and domestic monetary intervention after 2008 skewed our market. To ignore that is akin to someone who smokes in bed, sets their house on fire, gets saved by the fire department, and...
  15. D

    Baby, we got a bubble!?

    Eug, the issue is not just the mortgage rate. It is the direction of mortgage rates.. When rates are declining, that expands the pool of buyers and their buying power. When rates are rising (even if still historically lower) it has the opposite effect. Remember, RE is a marginal market...
  16. D

    Baby, we got a bubble!?

    Not necessarily. The BOC's rate determines variable mortgage rates. However the bond market determines fixed mortgage rates. After the US Fed speech today, US bond rates have jumped, and Canadian bonds have followed (up 6% today). The key rate to watch is the Canadian 5 yr gov't treasury...
  17. D

    Baby, we got a bubble!?

    I understood your point. But you have not understood mine. The section I have bolded above is the source of the confusion. The 2012 sales figure you quote is preliminary (before the 5% decrease from the sales that fall through) The 2013 sales figure you quote is also preliminary. And the YOY...
  18. D

    Baby, we got a bubble!?

    I understood your point. But you have not understood mine. The section I have bolded above is the source of the confusion. The 2012 sales figure you quote is preliminary (before the 5% decrease from the sales that fall through) The 2013 sales figure you quote is also preliminary. And the...
  19. D

    Baby, we got a bubble!?

    TREB publishes "preliminary" sales figures. However, these typically include about 5% of deals that fall through for one reason or another. However when they compare the YOY changes, they compare the current months preliminary data with the prior years final data. (ie final=after the 5% of...
  20. D

    Baby, we got a bubble!?

    Paywalls are easy to get around. Just go to your cookies, search "theglobeandmail" and delete the cookies. (google this if my instructions are unclear) I've posted the article below. The measure is for the carrying costs of an average priced detached bungalow, including property taxes and...

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