Daily Archives: January 31, 2012

Don Campbell Postpones Alberta’s “Real Estate Frenzy” to 2013

Posted on January 31, 2012 | 3 Comments

Last April, Don Campbell elicited headlines with his ‘Wake-up Alberta Tour’ where he proclaimed that without question Alberta would see a ‘real estate frenzy’ the following year.

Below is an excerpt from April 16, 2011 Calgary Herald:

“Alberta is 18 months away from a real estate frenzy,” says the author of the bestselling book, 97 Tips for Canadian Real Estate Investors. “There’s no question the frenzy is coming here.”

The economic conditions in Alberta are the reasons why -and it will hit Calgary first and foremost, he says.

Now he says 2012 will mark ‘a lot of people dumping properties into the market.’  The next logical development of course being increased housing demand in 2013.

Alberta forecast begins at the 7:23 mark

Transcript:

“Calgary & Edmonton’s real estate markets have not moved, they have barely moved actually over the last 12-16 months. At the same time population’s grown, at the same time average incomes have gone up, at the same time vacancy rates have gone down, and at the same time rents have gone up. You know what’s going to happen next, you absolutely know because you paid attention to the economic fundamentals, that demand on that housing market – on the resale and new homes – is going to start to take off. It’s going to start to take off in 2013, not 2012, because in 2012 you’re going to see a lot of people dumping properties into the market that they bought what they believe is at the wrong time.”

How accurate have his forecasts been? CLICK HERE, and be sure to read the comments as well.

 

Related posts:

November 2011: For Posterity
July 2011: When Average Just Isn’t Good Enough

→ 3 Comments

Posted in Calgary realestate blog

Tagged , ,

A Bubble By Any Other Name…

Posted on January 31, 2012 | 3 Comments

Don’t call it a bubble, it’s a balloon. Unlike the US housing market crash, Canada’s housing market is expected to deflate slowly rather than pop, according to BMO chief economist Sherry Cooper.

However, as economic analyst Ben Rabidoux tweeted, “Interestingly, the same analogy used by David Lereah describing US real estate market in ’05″

In an interview aired on November 29, 2005, NAR’s then chief economist David Lereah had some eerily similar thoughts on the US housing market.  Below are some highlights:

DAVID LEREAH: Well, first, most of the news has been softening in the housing sector. It’s beginning to slow down. The boom is — has peaked and we’re starting to see some slowing.

INTERVIEWER: Was there ever such a thing as a housing bubble?

DAVID LEREAH: I don’t like to use the word “bubble” because bubbles burst.

INTERVIEWER: Exactly.

DAVID LEREAH: Balloons don’t burst. You can put air in a balloon and it can expand or you can deflate a balloon, where air comes out. So if you’re looking at different metro markets around this country that got real hot over the last four years, I like to use the imagery of balloons because they’re getting hot. You’re putting more air into those balloons. The prices are going up. But now air can come out of the balloon rather than the balloon popping.

INTERVIEWER: So we’re hearing a hissing sound rather than a pop.

DAVID LEREAH: I think that’s probably the best analogy to use right now.

You can read or watch the entire interview here

Do you think there are enough similarities to warrant a degree of cautiousness?

→ 3 Comments

Posted in Calgary realestate blog

Tagged , ,

Desjardins: A Vancouver/TO Correction Could Spill Over

Posted on January 31, 2012 | Leave a comment

A report released by Desjardins, the largest cooperative financial group in Canada, states that real estate market is raising concerns.  Although the chances of a housing market collapse remains relatively remote, they present a number of factors that make it likely we’ll see a slowdown with some markets actually declining.

The report suggests that Canada’s real estate market is heading for a gradual and orderly pullback.

“That said, an economy’s adjustments often happen more quickly than initially anticipated. We can therefore not rule out the possibility of a sharper correction by the real estate market, especially if Canada’s economy is hit with a major shock, such as a steep drop in commodity prices or a substantial decline in earnings and employment resulting from heavier erosion of economic conditions. Although the risks of sharp corrections primarily affect Toronto and Vancouver, these two markets could potentially generate a negative spillover effect that could impact the entire Canadian real estate market.”

The last paragraph of the report was interesting – was he hinting at something he’s privy to?

As we said earlier, the government has already made three attempts to curb the real estate market’s advance by tightening mortgage lending conditions. The goal is of course to find the right mix to slow the market without making it collapse.

However, the third series of measures was announced nearly a year ago now, and we must conclude that the tightening introduced to date has not slowed the market enough. Under these conditions, it is likely, and perhaps even desirable, that the federal government will shortly announce a fourth series of measures to further limit mortgage credit. Among other things, the government could be tempted to once again raise the minimum down payment on new loans (it went from 0% to 5% in October 2008).

You can read the entire report here

→ Leave a comment

Posted in Calgary realestate blog

Tagged ,