Despite Bank Of Canada Hubris, Existing Home Sales Crash In May

Tyler Durden's picture

The Bank of Canada is stuck between the rock of a housing bubble (textbook-based trickle-down confidence-inspiration) and a hard place of a housing bubble (total lack of affordability) as it proclaimed this week that it may withdraw stimulus because, paraphrasing, everything was awesome. Well, today's existing home sales collapse may change that tune quickly...

Bloomberg reports that in a speech she’s delivering in Winnipeg, Manitoba, Senior Deputy Governor Carolyn Wilkins highlighted how the nation’s recovery is broadening across regions and sectors, giving policy makers “reason to be encouraged.”

 
 

“As growth continues and, ideally, broadens further, Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required,” Wilkins said in the text of a speech she’s giving Monday.

 

“At present, there is significant monetary policy stimulus in the system.”

 

"The adjustment to lower oil prices is now largely behind us, and we are looking for signs that the sources of growth are broadening across sectors and regions,” Wilkins said. “The signs are encouraging.”

Well, wih the worst print on record, Canada existing home sales crashed 6.2% MoM in May...

 

"The signs are less encouraging now"

Below we again put Canada's housing market, and bubble, in perspective with some of our favorite charts, first showing total Canadian household debt compared to the US. Most of this is in the form of mortgages.

Next, despite Canada's low rates, the debt service ratio of an average Canadian household is nearly 40% higher than when compared to the US.

And finally, the punchline: indexed home prices in Canada compared to the US. This needs to commentary.

This won't end well... and as this month's home sales data shows, the pain is just beginning.

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charlewar's picture

Canada has an even bigger problem..Trudeau's unbridled encouragement of muslim filth infestation...

Stormtrooper's picture

We've got guns for you just south of the border.  But you have to do your own cleanup work.

Déjà view's picture

Goods + services + income + transfers = CURRENT ACCOUNT BALANCE...plus or negative...
Canesestan is NEGATIVE ranked 197/199 being worst...along with other 5-EYES.
Any wonder these deadbeats launder HOT Chinese money in RE...

https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...

U.S. ranked last @199...can't demand C.O.D.

nope-1004's picture

"Crashing" in January, when the igloo won't open.... ok, I can see that.

But in May?  This is VERY telling.  Look out below!

thedespised's picture

Canada has more guns per capita than the USA

mtl4's picture

If you count unknown sales maybe, otherwise Canada has about 1 gun for every 3 people while the US is about 1:1

I agree though, where I am most households have weapons stashed all over the place, many from way before sales records.

Direct Democracy's picture

Incorrect: US GPC 113/100, Can. 31/100 people.

Sages wife's picture

Especially if they're gay trannies. Oh, and flat broke, we have a program for that.

HonoraryCarioca's picture

But remember who Trudeax serves. The elites, Israel and Mossad/CIA/MI6 have fermented this anti-Muslim sentiment through false flag attacks and excessive immigration in order to encourage regional conflict (i.e. weaken its neighbors) and further expand Israeli influence. Every time we repeat anti-Muslim rhetoric we are furthering the Zionists agenda. 

johngaltfla's picture

Well the Canuckistanis quit buying in Florida thus the glut of condos in Miami and now building up on the West Coast. When Toronto and Vancouver rolls over it will generate a shitstorm of unreal proportions.

Sages wife's picture

Welcome to Chinada. All your country is belong to us.

Bay of Pigs's picture

They quit buying in Maui when their loonie tanked a few years ago. Now the tourists aren't even showing up which is a disaster for places like Kihei which is heavily dependent on Canadian visitors.

markar's picture

Except hotel and RE prices in Maui are getting worse by the day. Someone's buying.

Bay of Pigs's picture

Yeah, the 1%ers, that's who.

Defiated's picture

....maybe the 'old folks'....

I continue to 'rent' in Southern 'So-Cal'.....meaning Pacific Mexico....waterfront '4 star' hotel....$67 CDN/night

All the beautiful weather WITHOUT the 'high prices','mericans, and paranoid border guards....

Where Exactly?...sorry, its a secret..

You love your America  .... you can keep your America!!!!

Stormtrooper's picture

Pft, lack of inventory.  Just build some more and they will buy.

Cordeezy's picture

That looks familar.... where I have seen a housing crash start out like that?

 

 

www.escapeamazon.com

 

TheSilentMajority's picture

Short-term volume decline noise does not equate to any significant/prolonged price decline eh.

It is very easy to circumvent the annoying foreign buyers taxes eh.

Usually takes a few weeks for the market to figure that out eh.

PeeramidIdeologies's picture

Yes but what signal is being communicated to forgien buyers eh?

I can only guess the ratio of home owners who have been planning to profit from the purchase of their home... eh?

chubbar's picture

What is interesting to me is that we've now seen 2 head bankers come out trying to tell everyone that the economy is doing great when every frickin metric is telling us the opposite.

This "who are you going to believe, me or your lying eyes" strategy seems desperate and insane. Raising rates into what appears to be a massive economic slowdown can only exacerbate the stall. This is intentional, pretty clear these folks are making damn sure the crash comes on schedule, whatever that timeframe is.

Rock On Roger's picture

Who could've seen that coming?

johngaltfla's picture

Just remember that Janet "all is well, remain calm" Yellen was head of the San Francisco Fed and claimed the market was stable and the banking system sound; just 4 WEEKS after Indymac went tits up.

It wasn't a good look then and she's just as retarded now.

John Law Lives's picture

"There's never been a better time to buy a home..."

Realtor_FUBAR

asteroids's picture

The typical Canadian is loaded up to the eyeballs with debt. Should the FED continue to raise rates, the typical Canadian is sunk. A lot of interest rates in Canada are determined in New York and not Toronto.

The Real Tony's picture

Stephen Poloz lives in some sort of a dreamworld where he thinks cutting interest rates will solve every problem in the universe. I'd have to see it to believe it if he ever raises intererst rates.

grasha87's picture

Jim Rickards has attacked free trade and comparative advantage in his new book, the Road to Ruin. Here's why he is wrong:

 

https://bunky1787.wordpress.com/2017/06/04/jim-rickards-free-trade-a-bar...

monk27's picture

He's actually right. On the other hand, your extensive rambling of an article is worthless...

The Real Tony's picture

The reason wasn't Chinese holidays that month because for the Chinese in Canada every day is a holiday.

peterk's picture

only a  spike in EURODOLLAR rates wil send this  global property bubble  down.

else its more of the same.... up she goes.

 

Eurodollar  lately sideways to up.. but only just

dont get me wrong, i want  it to crash and burn.

PeeramidIdeologies's picture

Poloz has been eating his own words for 6 months now. The situation in Canada is thoroughly out of hand, and I personally could careless.

Everyone in this country has their head in the clouds. I shit you not, people feel completely untouchable up here.

PeeramidIdeologies's picture

Yeah you guys like that...but I've gone from disliked, to ridiculed and soon t be vindicated. None of which has, or will be conducive to an enjoyable existence in this fukin farce

Charming Anarchist's picture

No. 37431 - May 4, 2017

Coram: McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon, Côté, Brown and Rowe

BETWEEN:

Committee for Monetary and Economic Reform (“COMER”), William Krehm and Ann Emmett
Applicants
-
and
-
Her Majesty the Queen, Minister of Finance, Minister of National Revenue, Bank of Canada and Attorney General of Canada
Respondents

JUDGMENT
The request for an oral hearing is dismissed.
The application for leave to appeal from the judgment of the Federal Court of Appeal, Number A-76-16, 2016 FCA 312, dated December 7, 2016, is dismissed with costs.

https://www.canlii.org/fr/ca/csc-a/doc/2017/2017canlii25790/2017canlii25...

HonoraryCarioca's picture

The secretive owners of the central banks win again, of course. No surprise there. 

PeeramidIdeologies's picture

Interesting. Good on them for taking the ball to the house. Sadly just another display of how deeply rooted the bastards are

taketheredpill's picture

 

 

I assume the drop in Sales was mainly due to Toronto after Ontario introduced a foreign buyers tax similar to the one Vancouver did in 2016.

The B.C. tax knocked prices down for a few months, then it all started up again as the price-indifferent buyers rushed back in.

i think only a Chinese implosion (and currency collapse) wil kill this beast.

issimo's picture

It's 1989 all over again. In late 1989, the unemployment rate in Toronto was under 4%. A short 18 months later, in early 1991, it was over 12%, almost entirely due to a collapsing housing bubble.  This time, no one will have any leverage left to buy at the bottom, which will just keep dropping...and dropping...and dropping.  Poloz is no doubt well aware of all of this.  His policy is all about trying to avoid future blame for what may turn out to be a short-term economic catastrophe, especially in Toronto.

chickadee's picture

Poloz was so busy playing currency wars that the housing bubble must have been insignificant to him. He has nobody else to blame but himself. I'm sure his staff are worried about it.