BMO: Uberbears Have Been Spectacularly Wrong

The housing debate on whether there will be a hard or soft landing rages on across the country with outside observers also chiming in. Some regions seem to be full on correcting while other areas are still setting records.  Suffice it to say there is plenty of evidence to back almost any opinion.

The following excerpt is from BMO Focus May 24th:

A cooling housing market: The only debate when it comes to Canadian housing appears to be whether the landing will be hard, or just bumpy. The legion of uberbears have been spectacularly wrong, at least so far, with prices still edging higher in the past year and new home building resetting nicely to just below demographic demand.

But, few dispute the fact that housing will be a drag on growth for the medium term, not the highly favourable tailwind of the past three years. With construction jobs representing a record high share of total employment at more than 7% this cooling will weigh more heavily than usual.

A cooling housing market is just one of many challenges facing the new  Bank of Canada Governor Stephen Poloz who takes over on June 3rd.

Other challenges include:

  • slow economic growth
  • low inflation
  • an overvalued currency
  • record household debt

You can read the entire report here.

3 responses to “BMO: Uberbears Have Been Spectacularly Wrong

  1. The Uberbear

    My heart is broken BMO. How can you say such a thing? The uber bears are wrong, and prices can only increase… Forever… I find it sad that BMO, even banks making measures with ridiculous underlying assumptions (I am lookin at you RBC affordability index), to convince my uberbear buddies and I, that nothing will go wrong in Canada. Debt can only increase as a % of GDP, and we are safe because we can ride this housing boom forever to create employment in finance, construction and other real estate related spinoffs driven by HELOC and consumer debt. Prices can only go up, and CMHC will lower their standards moreso to get every person, and immigrant in a home ASAP. This market isnt driven by government-backed CMHC insurance and speculators, its driven by rising incomes because we’re better off than those silly Americans. $1M for a bungalow in Vancouver is a deal, and is probably bought by Asians flying by helicopter because they want their kids to go to a Canadian school. All is good, get in now, or be priced out forever. Last but not least, get your mortgage at BMO. The Canadian housing market is fine.

  2. Always get a kick out of a different spin, the facts are the Calgary is doing well and has been in a bull run well over 10 plus years . I ve been proven wrong over and over , am still on the sidelines wishing I could of bought years ago . Myself like others are only jealous we did not make the jump and now look back with regret.
    Going ahead maybe things will adjust or not , however it will never go back to cheap housing as the market has moved ahead . The concern will be about how to get the younger people into housing . So as a investment for those who can I say rentals is the way to go !

    My two cents

  3. Pingback: Canadian Housing Market Following Soft-Landing Playbook | Calgary Real Estate Review

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