As recently as January 30th of this year, BMO wrote:
“In our view, the housing boom will more likely cool than correct, even in condo-driven Toronto—the target of many scary headlines. The possible exception is pricey Vancouver”
But then on March 6th, BMO released this:
Toronto House Prices Bubbling Higher- Defying expectations (and gravity), Toronto’s housing market surged higher in February, with sales up 16% y/y (10% adjusted for the extra day) and average prices jumping 11% to crack the half-million mark for the first time.
We’ve always said the market remains vulnerable to a correction in the face of a shock. It could also “pop” in the absence of a shock should current frothy trends persist.
While back-pedaling on Toronto, BMO remains adamant that there is/was no bubble in Canada, even offering this doozy of an explanation in yesterday’s report (entitled btw: Mostly Calm, ex Toronto Tornado)
Could it just be possible that with a high percentage of Canadian analysts and media outlets located in Toronto, that the perception of Canada’s housing market is being deeply influenced by the strength in the local market? Most signs continue to indicate that the national market is broadly balanced
I found BMO’s sudden sentiment change interesting, and especially found the “we’ve always said” quote amusing. What I do find disconcerting is how quickly their viewpoint can change, especially in light of no new developments to warrant the shift in thinking.
What else will BMO tell us they’ve “always said” about the housing market down the road?