interested
Senior Member
If housing starts are going to slow to levels consistant with demographic fundamentals, does that mean they've been overbuilding all this time as many have alluded to?
Not necessarily. Assuming they are right they may be suggesting that all the demand from investors to rent out or observe "appreciation" and the rental supply/end user supply may be in balance now and that only demographic fundamentals will play a part going forward: i.e. slower demand going forward. This would be predicated on an assumption that there was a need to satisfy demand until now. One could interpret this to believe that investors will only buy based on the rental vacancy with the assumption they can get long term tenants and end users will buy for personal use only going forward. Few will be buying going forward to "flip" since only long term demographic fundamentals will be at play.
It would suggest that CMHC (rightly or wrongly) is seeing an end in 2011 to bidding based on future appreciation rather than for actual usage needs.
In any event, if CMHC is correct, it should at the very minimum mean the end of price increases or at most an increase based on CPI. This is significant only in that CMHC if I recall correctly was stating until recently there would be still be increases in 2011. Even CREA is backing off on that, let alone all the Banks and other individuals calling for a decrease. So it seems quite unanimous that prices have peaked (which we have been stating occured in 2010 May) but also that prices will not be going up from here.
Leaves Condo George to argue the opposite. CG, I hope in your busy schedule you will have a moment to let us know you are still doing well and update us as to whether your clients and your colleagues are as busy as you eluded to about 2-4 weeks ago.
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