Our Mission: Ross Kay Realty Consultants mission is to use our unique position to provide statistically relevant and prudent analysis of the Canadian Realty Market to assist both institutions and consumers with navigating the risks inherent when managing equity contained in residential real estate.
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Just Released:
April 8th.2016 |
Van and Tor: Smoke and Mirrors?
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Released: March 31st.2016
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Professionals
If you know what AREUEA is or what the Edwin Mills awards are, you would be shocked to find 9 of the last 14 year winners are supported by data, theories and methodologies that would never pass the simplest informed challenge. If you subscribe to Shiller and accept his theories as real, we can demonstrate what he himself could not. It is 2016 and it has been five full years since our research into the state of the housing market intelligence sector started and we have reached a point where establishing our own intelligence's proprietary nature makes a good business decision.
We have concentrated, clarified and altered the names of our products to better align with the long term goals of our business, that being recognized as Canada's Authority on Homeownership. Our forecasting over the last 2 years and the fact our methodology in a historical review has a virtual 100% accuracy from 1985 forward places us in a unique position in this sector. In the past our fears of loss of the proprietary nature of our methodology now no longer applies as we now have a commanding knowledge of just how limited the current study of real estate economics has developed.
If your business relies upon the Canadian Homeownership market only Ross Kay Realty Consultants intelligence and insight can unconditionally provide you the information and analysis you need. Whether it's the risk current mortgage portfolios are exposed to, how foreign buyer data can be collected, what percentage of sales are going to first time buyers or where the housing stock must be modified going forward, only Ross Kay Realty Consultants can produce the answers you seek.
You can wait until the next house price correction wipes hits and then spend years looking in hindsight or you can take steps today to capitalize on tomorrow by using our research.
When a first time buyer purchases their first home in Thunder Bay taking on $200,000 in mortgage debt and then through 20 other trades that mortgage debt is taken out by the owner of a $3 million dollar Rosedale home in Toronto as equity, only RKRC has the insight to explain the 20% gain that Rosedale owner experienced in the last 12 months.
Professionals will not read the above comment anywhere else.
Contact us at [email protected].
Regards
Ross
If you know what AREUEA is or what the Edwin Mills awards are, you would be shocked to find 9 of the last 14 year winners are supported by data, theories and methodologies that would never pass the simplest informed challenge. If you subscribe to Shiller and accept his theories as real, we can demonstrate what he himself could not. It is 2016 and it has been five full years since our research into the state of the housing market intelligence sector started and we have reached a point where establishing our own intelligence's proprietary nature makes a good business decision.
We have concentrated, clarified and altered the names of our products to better align with the long term goals of our business, that being recognized as Canada's Authority on Homeownership. Our forecasting over the last 2 years and the fact our methodology in a historical review has a virtual 100% accuracy from 1985 forward places us in a unique position in this sector. In the past our fears of loss of the proprietary nature of our methodology now no longer applies as we now have a commanding knowledge of just how limited the current study of real estate economics has developed.
If your business relies upon the Canadian Homeownership market only Ross Kay Realty Consultants intelligence and insight can unconditionally provide you the information and analysis you need. Whether it's the risk current mortgage portfolios are exposed to, how foreign buyer data can be collected, what percentage of sales are going to first time buyers or where the housing stock must be modified going forward, only Ross Kay Realty Consultants can produce the answers you seek.
You can wait until the next house price correction wipes hits and then spend years looking in hindsight or you can take steps today to capitalize on tomorrow by using our research.
When a first time buyer purchases their first home in Thunder Bay taking on $200,000 in mortgage debt and then through 20 other trades that mortgage debt is taken out by the owner of a $3 million dollar Rosedale home in Toronto as equity, only RKRC has the insight to explain the 20% gain that Rosedale owner experienced in the last 12 months.
Professionals will not read the above comment anywhere else.
Contact us at [email protected].
Regards
Ross
Federal Government projected to add $3000 of Debt to every Canadian Home
By 4:00PM ET today March 22nd, 2016, each Canadian Homeowner will shoulder a staggering amount of debt obligation they are probably not even thinking about. There are approximately 20.5 million Canadians who will actually pay income tax in 2016. Virtually 100% of those Canadian tax payers are Homeowners. While corporations can fold up or move, Homeowners cannot. Quietly Federal and Provincial Governments have basically used the homes of those taxpayers to secure the ongoing payments of the massive debts used to keep those Governments in power.
The further East you head across Canada provincially, the larger the Combined Government Debt (CGD) against Home values become. The average British Columbia home carries $105,503 in Combined Government Debt equaling a CGD to Home Value Ratio
(CGD to V) of 17.4% against what those homes are appraising at today. In Alberta the CGD has reached $75,090 per home but against lower home values in that province the CGD to V ratio will have reached 25.4% by the end of today. It only gets worse further East.
In Ontario the CGD to V ratio will sit at 31.4% by day's end while in Quebec an unfathomable 53.4% ratio will be reached. When mortgage debt is added to the equation by year's end 2016, the only province where homeowners would not see 100% or more of their home's value securing some form of debt that those homeowners are responsible to repay will be located in British Columbia which is still being supported through home appraisals that far exceed their interest rate adjusted values.
Provincial Combined Government Debt per Home Owned
BC = Provincial $44,699 + Federal $60,804 = $105,503
AB = Provincial $14,286 + Federal $60,804 = $75,090
ON = Provincial $74,001 + Federal $60,804 = $134,805
QC = Provincial $77,021 + Federal $60,804 = $137,825
Home owners are most impacted by a governments spending initiatives yet they seem to be kept in the dark about the obligations they are being forced to assume. Maybe this is why Governments across Canada have never taken any substantial action to curb house price growth since 2003. Higher home prices keep the CGD to V ratio low.
Regards
Ross
By 4:00PM ET today March 22nd, 2016, each Canadian Homeowner will shoulder a staggering amount of debt obligation they are probably not even thinking about. There are approximately 20.5 million Canadians who will actually pay income tax in 2016. Virtually 100% of those Canadian tax payers are Homeowners. While corporations can fold up or move, Homeowners cannot. Quietly Federal and Provincial Governments have basically used the homes of those taxpayers to secure the ongoing payments of the massive debts used to keep those Governments in power.
The further East you head across Canada provincially, the larger the Combined Government Debt (CGD) against Home values become. The average British Columbia home carries $105,503 in Combined Government Debt equaling a CGD to Home Value Ratio
(CGD to V) of 17.4% against what those homes are appraising at today. In Alberta the CGD has reached $75,090 per home but against lower home values in that province the CGD to V ratio will have reached 25.4% by the end of today. It only gets worse further East.
In Ontario the CGD to V ratio will sit at 31.4% by day's end while in Quebec an unfathomable 53.4% ratio will be reached. When mortgage debt is added to the equation by year's end 2016, the only province where homeowners would not see 100% or more of their home's value securing some form of debt that those homeowners are responsible to repay will be located in British Columbia which is still being supported through home appraisals that far exceed their interest rate adjusted values.
Provincial Combined Government Debt per Home Owned
BC = Provincial $44,699 + Federal $60,804 = $105,503
AB = Provincial $14,286 + Federal $60,804 = $75,090
ON = Provincial $74,001 + Federal $60,804 = $134,805
QC = Provincial $77,021 + Federal $60,804 = $137,825
Home owners are most impacted by a governments spending initiatives yet they seem to be kept in the dark about the obligations they are being forced to assume. Maybe this is why Governments across Canada have never taken any substantial action to curb house price growth since 2003. Higher home prices keep the CGD to V ratio low.
Regards
Ross
Read Ross' letter to the Minister of Finance dated March 15th.Honourable Minister,
On December 15th, 2015 as home prices nationally had become the focus of Canada's economic problems and as you the Minister of Finance was seeking intelligence in the preparation of your first budget, the lobbyists from the Canadian Real Estate Association released the following forecast: "The national average price is forecast to edge higher by 1.4 per cent to $448,700 in 2016." Whether this forecast was released through their incompetence and with total disregard to then current trajectory of Canada's Average Sales Price for 2016 the information lobbied to the Minister of Finance and put forward to the housing experts of CMHC, clearly and precisely suggested " don't worry all that nonsense about Canada's housing bubble growing bigger will end in 2016. No further action needed! Today a mere 90 days after the release of the December 15th forecast, the Canadian Real Estate Association, only days from the release of the Minister;s first budget, has the audacity to cleverly release this new house price forecast: "CREA's forecast for national average price has been revised upward to $478,100 in 2016 representing an annual increase of eight per cent." which simply returns the forecast to the trajectory it was on and has remained since December 15th, 2015. Since the advent of modern real estate data collection (1985) even during the most radical and volatile housing markets in Canadian history, home price trajectory has never moved the 6.6% CREA is suggesting it's own intelligence now forecasts. The largest 90 day change in home price trajectory has never exceeded 4% ( of the actual price) and only did that once. Not in 1984, 1990, 2003, 2007,or 2010 the four periods of largest swings in home prices being recorded was 4% exceeded. When CREA released it's forecast on December 15th, 2015 it was signalling to the 11 million homeowners in Canada and the world at large that the Canadian housing bubble would "pop" beginning in April 2016. It was a mathematical certainty that this was the message being communicated to the Minister of Finance and the new Liberal government because that event would need to have happened and the worse house price correction ever recorded during the next 9 months was needed to meet the math. What CREA's forecast did from December 15th til today ( a time now too late to rewrite a national budget) was to handcuff the Minister of Finance into not implementing some of the tools he has at his disposal to reign in house price growth without triggering an immediate collapse. It is now too late for the Minister to gradually lower GDS limits to an eventual 30% on CMHC mortgages. It is too late to implement a rental property capital gains exemption that would immediately improve affordability and curb price growth. It is too late to mandate CMHC Appraisal guidelines revert to those used in the insurance industry, preventing home buyers from unknowingly over paying for homes they are acquiring. CREA has served its members well. Assuring at least another season or two of easy sales where its unskilled, under trained and incompetent sales people are allowed to sell homes to the innocent public. It is a very very sad day. Regards Ross Announcement:
Home Ownership Equity Preservation and Growth Program After protecting over 3 Billion dollars in clients real estate assets we are proud to release updated versions of our home equity preservation and growth strategies. Over the last 40 years our constantly evolving programs have allowed home owners to unlock additional appreciation in their homes' equity gains while limiting their exposure to house price corrections. Our unbiased and independent approach combined with our unique perspective on the realty market allows home owners to make rational and informed decisions that are relevant to their stage of home ownership. The program relaunched today targets home owners between the ages of 40 and 50 years old who are positioning their lives in order to retire at age 65. Other programs have been tailored to those under 40 and over 55 have already been updated and are also available today. Learn More Click Here You can obtain an overview by emailing us at [email protected] . Questions of the Week December 11th-
How can one home that has had over $60,000 in repairs and maintenance recently completed sell for the same price a similar home that was in need of those repairs and maintenance sell for the next day? RKRC's Viewpoint
Intelligent Housing Market decisions require a market to be measured using data that is reflective of the specific market being addressed. Even a simple measure like what parts of a nation's housing stock are owned in a manner that allows those homes to be part of the national conversation requires an understanding of the underlying fundamentals that frame such a conversation taking place. In Canada in September RKRC used just under 10.7 million homes in our overall market review but in our intensive four province outlook we focused on just over 9 million because they dominate the conversation across the nation. When a claimed 32,000 ReSale homes are to have been sold in Calgary CMA, RKRC knows fewer than 25,000 actually were resale homes from Calgary CMA. When 205,000 ReSale homes are suggested to have been sold in Ontario when fewer than 180,000 were actually sold RKRC granular data explains. We know exactly how much price growth an owner in Quebec is seeing before they decide to move and how many sales "potentially" are the result of foreign purchases in Vancouver or why we need to use the word "potential" because in the next month that "potential" becomes fact with no misrepresentation being made. Real Estate Economics and Analysis is a discipline where understanding how an infrastructure functions and how data is collected allows the perspective to say, "housing bubbles begin forming the moment the previous market correction has ended." Looking for insight or to obtain reliable, unbiased and thorough housing intelligence, give us a call! |
Latest Professional Releases:
December 16, 2015 - Canadian Banks face Mortgage Portfolio Overvaluation. Latest Public Releases: November 27, 2015 - Bank of Canada January rate cut inflates Canada's housing bubble October 23, 2015 - Canada's Hidden Sub-Prime Mortgage Crisis Latest RKRC in the News: National Post CBC 630Ched Toronto Star |
BAD DATA + BAD INTERPRETATION
= BAD DECISIONS
Housing markets function in one way and one way only because of the infrastructure they are dependent upon. Real Estate Transactional Data (RETD) that is accurately interpreted for what it is recording, tracks a housing market with adequate lead time to allow a rational and informed decision to take place.
In Canada each month over 80 unique sources for RETD are available. RKRC now collects over 250 versions of that data in it's raw format and then we filter it to allow it to be interpreted for what it is actually recording. This is how a missing sale in St. John's this month turns up months later in Fort McMurray.
It's not magic but simple math when you have the right formula!
RKRC has the developed the formulas you need to make the decisions you make the right ones! Contact us at [email protected]
= BAD DECISIONS
Housing markets function in one way and one way only because of the infrastructure they are dependent upon. Real Estate Transactional Data (RETD) that is accurately interpreted for what it is recording, tracks a housing market with adequate lead time to allow a rational and informed decision to take place.
In Canada each month over 80 unique sources for RETD are available. RKRC now collects over 250 versions of that data in it's raw format and then we filter it to allow it to be interpreted for what it is actually recording. This is how a missing sale in St. John's this month turns up months later in Fort McMurray.
It's not magic but simple math when you have the right formula!
RKRC has the developed the formulas you need to make the decisions you make the right ones! Contact us at [email protected]
Recent Public Release:
Calgary
Composition Adjusted Sales Price falls to $318,397 as of August 30th 2015.
When housing market watchers rely on Average Sale Prices or any of the current HPI models ( that all align back to the Average Sale Price when adjusted for what is being measured and when it was measured ) what they are seeing is actually a measure that includes the cumulative inflation (house price bubble) that is a result of a constantly evolving sales mix. This applies against all Average Sale Prices whether you are measuring a single subdivision or an entire nation. On August 30th the Average Selling Price for the City of Calgary was reported as $466,570 but in fact 31.7% of that Average was caused simply through a change to what was being measured and the cumulative consequences attached to not making simple adjustments for that change. This caused Calgary's housing bubble to inflate further in August..
At present Calgary's Average Sale Price is inflated by 50% over it's composition adjusted value. Whether you choose to read the current ongoing house price bubble as 31.7% or 50.0% will probably depend on how much you want to ignore it.
Ross on September 23rd.
Calgary
Composition Adjusted Sales Price falls to $318,397 as of August 30th 2015.
When housing market watchers rely on Average Sale Prices or any of the current HPI models ( that all align back to the Average Sale Price when adjusted for what is being measured and when it was measured ) what they are seeing is actually a measure that includes the cumulative inflation (house price bubble) that is a result of a constantly evolving sales mix. This applies against all Average Sale Prices whether you are measuring a single subdivision or an entire nation. On August 30th the Average Selling Price for the City of Calgary was reported as $466,570 but in fact 31.7% of that Average was caused simply through a change to what was being measured and the cumulative consequences attached to not making simple adjustments for that change. This caused Calgary's housing bubble to inflate further in August..
At present Calgary's Average Sale Price is inflated by 50% over it's composition adjusted value. Whether you choose to read the current ongoing house price bubble as 31.7% or 50.0% will probably depend on how much you want to ignore it.
Ross on September 23rd.
Public Updates:
Posted July 31st., 2015 3:13pm.
The first week in August will see our Research Division begins to release key research for the benefit of the Canadian Consumer and to serve as a broader educational tool for economists and housing analysts across the nation. In preparation for these releases we are posting live today a comparison between how Canada Mortgage and Housing Corporation interprets a set of housing data and how Ross Kay Realty Consultants would interpret the exact same data set.
Without prejudice and with the full understanding that how housing markets function are not part of any post-secondary study in Canada, Ross Kay Realty Consultants can serve as your guide through the risky waters ahead. Please pay special attention to the first paragraph in these reports.
Last November CMHC released it's HPAA the release found at this link. The materials below under the CMHC heading come directly from that report and is the sole source. Click this link to go to the CMHC site..
The first week in August will see our Research Division begins to release key research for the benefit of the Canadian Consumer and to serve as a broader educational tool for economists and housing analysts across the nation. In preparation for these releases we are posting live today a comparison between how Canada Mortgage and Housing Corporation interprets a set of housing data and how Ross Kay Realty Consultants would interpret the exact same data set.
Without prejudice and with the full understanding that how housing markets function are not part of any post-secondary study in Canada, Ross Kay Realty Consultants can serve as your guide through the risky waters ahead. Please pay special attention to the first paragraph in these reports.
Last November CMHC released it's HPAA the release found at this link. The materials below under the CMHC heading come directly from that report and is the sole source. Click this link to go to the CMHC site..
Ross Kay Realty Consultants Interpretation
In recent years, there has been little
change in local housing market conditions that have had any real
effect on house prices. For example, nationally house prices only
decreased by 2.5 per cent from the peak of the fourth quarter of 2007 to the
trough of the first quarter of 2009 as even the far reaching effects
of the recession failed to stop the flow of equity through the
nation's sales chain.
By the end of 2009, the combination of an improving economy and very low mortgage rates would only maintain Canada's housing sector on it's current pace of deceleration. Even the best Canadian homes being sold through members of co-operative listing services across Canada were seeing selling prices increase from June 2010 to February 2011 by only 0.8%. From May 2011 to February 2013, the pace of increase continued unchanged as the prices of homes being sold increased 3.5% during that entire 21 month window not even keeping pace with inflation. Beginning in July 2013 house prices began to outpace the rate of inflation as the pace of increase intensified, with interest rate declines begining to affect sales allowing more expensive homes to be sold with the actual average price going from $371,033 to $405,641 as of October 2014. This increase was caused by an increase in the actual average sale price paid for entry level homes in Toronto and Vancouver, allowing for more equity to be passed on up the Sales Chain in those markets. For example the national actual average for October was up 7.2% over the previous year. If Toronto and Vancouver were removed, the average dropped to 4.6%.
This recent experience demonstrates how, in the short and medium term, changes in the economic and financial fundamentals, other than interest rate changes, have little direct impact on homes sold through co-operative listing services in a national outlook. The ability and willingness of first time buyers to acquire debt continues to be the prime factor in house price direction the same way it has been since homes started to be traded.
Looking ahead the current failure rate of those looking to sell nationally is expected to fall further from the current 62% level, unless further cuts to interest rates or a lessening of lending qualification terms are enacted. This will bring price pressure to the resale market from those looking to sell. The overall housing market's activity is on pace to decelerate even further going forward.
By the end of 2009, the combination of an improving economy and very low mortgage rates would only maintain Canada's housing sector on it's current pace of deceleration. Even the best Canadian homes being sold through members of co-operative listing services across Canada were seeing selling prices increase from June 2010 to February 2011 by only 0.8%. From May 2011 to February 2013, the pace of increase continued unchanged as the prices of homes being sold increased 3.5% during that entire 21 month window not even keeping pace with inflation. Beginning in July 2013 house prices began to outpace the rate of inflation as the pace of increase intensified, with interest rate declines begining to affect sales allowing more expensive homes to be sold with the actual average price going from $371,033 to $405,641 as of October 2014. This increase was caused by an increase in the actual average sale price paid for entry level homes in Toronto and Vancouver, allowing for more equity to be passed on up the Sales Chain in those markets. For example the national actual average for October was up 7.2% over the previous year. If Toronto and Vancouver were removed, the average dropped to 4.6%.
This recent experience demonstrates how, in the short and medium term, changes in the economic and financial fundamentals, other than interest rate changes, have little direct impact on homes sold through co-operative listing services in a national outlook. The ability and willingness of first time buyers to acquire debt continues to be the prime factor in house price direction the same way it has been since homes started to be traded.
Looking ahead the current failure rate of those looking to sell nationally is expected to fall further from the current 62% level, unless further cuts to interest rates or a lessening of lending qualification terms are enacted. This will bring price pressure to the resale market from those looking to sell. The overall housing market's activity is on pace to decelerate even further going forward.
Warning of Week 29, 2015- Newfoundland-
Newfoundland home owners are now realizing that their home is worth the same today as it was in June of 2013. The price gains made in 2014 have been wiped out already in 2015. When inflation is taken into account the Average Home in Newfoundland is worth $7000 less than it was 24 months ago. Newfoundland should serve as yet another reminder of how taking no action on the residential real estate you own places you at serious financial risk.
Those Newfoundland owners who own their home "free and clear" are the one's losing more and more each day, while first time buyers are in fact remaining "above water" because of the rapidity of debt paydown possible with today's historically low interest rates. Sadly because the nation is oblivious to viable low risk solutions to protect and maintain equity growth in their homes, they instead are remaining passive and letting the market do to them the same thing it did to their parents and grand parents before them. There is a choice and today's losses can be reversed in many cases with a proactive home equity management program administered with the underlying market intelligence only Ross Kay Realty Consultants can provide.
That's the Reality of Realty!!
Newfoundland home owners are now realizing that their home is worth the same today as it was in June of 2013. The price gains made in 2014 have been wiped out already in 2015. When inflation is taken into account the Average Home in Newfoundland is worth $7000 less than it was 24 months ago. Newfoundland should serve as yet another reminder of how taking no action on the residential real estate you own places you at serious financial risk.
Those Newfoundland owners who own their home "free and clear" are the one's losing more and more each day, while first time buyers are in fact remaining "above water" because of the rapidity of debt paydown possible with today's historically low interest rates. Sadly because the nation is oblivious to viable low risk solutions to protect and maintain equity growth in their homes, they instead are remaining passive and letting the market do to them the same thing it did to their parents and grand parents before them. There is a choice and today's losses can be reversed in many cases with a proactive home equity management program administered with the underlying market intelligence only Ross Kay Realty Consultants can provide.
That's the Reality of Realty!!
Canada needs to watch Calgary and learn.
Calgary Outlook - July Warning
Issued July 2nd, 2015 using current sales chain forecast
How many Calgarians have been told that during the first 6 months of 2015 only 46% of Sellers could find a buyer for their home and the percentage is still dropping. Last year at this time a staggering 81% of Sellers were successful, so you may wonder why when Sellers are under this pressure prices have not been falling? This is the problem when you look at a real estate market through the lens of organized real estate and it's stake holders, instead of through a window of unbiased and rational interpretation.
In the first 6 months of 2014 Selling Prices increased on average $25,000 in a market where price inflation was ongoing. This year in 2015 the same 6 month period has shown prices have fallen $9000 on Average but that remains unreported. This decrease comes as price deflation has taken hold and is racing lower.
Calgarians may be surprised to learn that their housing market is so slow it is currently 50% slower than it was back in 2006.
Up until now New Homes Builders have not been competing against resales for the few buyers that are out there but with inventory and new completions now trending higher, the normal battle between new and resale will commence. Inevitably this leads to lower prices.
Worse is the fact in May the overall Canadian housing market stopped benefiting from the early 2015 mortgage rate reduction as the expected short surge of sales that moved the national market out of a one month contraction has now been accounted for in sales. Unfortunately consumers are probably next to hear that slower June sales were the result of "summeritis" taking hold or some other bizarre statement.
Calgary itself is set to see a 0.5 Billion loss to their local GDP this year on resale volumes alone. At year's end prices are on pace to be $14,500 lower in Calgary removing an estimated 6.3 Billion in Net Worth from Calgarian's bottom line.
This is the reality of realty !!
Regards
Ross
Buyers: Our Formal Recommendation for Calgary remains in a HOLD pattern if acquiring debt is required to make the purchase. ( Do NOT Buy)
Sellers: Our Formal Recommendation for Calgary remains the same. If liquidating debt is required do it now. ( IMMEDIATELY Sell)
In the first 6 months of 2014 Selling Prices increased on average $25,000 in a market where price inflation was ongoing. This year in 2015 the same 6 month period has shown prices have fallen $9000 on Average but that remains unreported. This decrease comes as price deflation has taken hold and is racing lower.
Calgarians may be surprised to learn that their housing market is so slow it is currently 50% slower than it was back in 2006.
Up until now New Homes Builders have not been competing against resales for the few buyers that are out there but with inventory and new completions now trending higher, the normal battle between new and resale will commence. Inevitably this leads to lower prices.
Worse is the fact in May the overall Canadian housing market stopped benefiting from the early 2015 mortgage rate reduction as the expected short surge of sales that moved the national market out of a one month contraction has now been accounted for in sales. Unfortunately consumers are probably next to hear that slower June sales were the result of "summeritis" taking hold or some other bizarre statement.
Calgary itself is set to see a 0.5 Billion loss to their local GDP this year on resale volumes alone. At year's end prices are on pace to be $14,500 lower in Calgary removing an estimated 6.3 Billion in Net Worth from Calgarian's bottom line.
This is the reality of realty !!
Regards
Ross
Buyers: Our Formal Recommendation for Calgary remains in a HOLD pattern if acquiring debt is required to make the purchase. ( Do NOT Buy)
Sellers: Our Formal Recommendation for Calgary remains the same. If liquidating debt is required do it now. ( IMMEDIATELY Sell)
The New Tipping Point?
"Popping" Canada's Housing Bubble
(learn more)
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Canada's Housing Bubble
(get calculation details here) |
38.9% as of March 31st, 2015
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Iceburg Analysis:
"The disregard of power aspects is greatly helped by the fact that concentration on the mechanics of economic and market adjustment within a given framework enables the economist to avoid the detailed occupation with facts which powerful social groups prefer to keep under a cloud of uncertainty. This desire for secrecy is in itself a real and objective difficulty. Nowhere is the analogy of the iceberg more appropriate than in this sphere: only a tiny fraction of the power play becomes visible (and that in a distorted form)." Kurt W. Rothschild
The power of our Engagement Index has never been vetted in a manner that is now available today.
On May 19th, 2013 RKRC made the Call that the Canadian real estate market had just died ( reported/recorded on the GreaterFool.ca ) as this signaled the time that on mass first time buyers ended their engagement with the housing market. The Initial Acquisition price for a home in Canada had finally bypassed either the willingness or the capacity of what that class of buyers would pay, so they lost interest and stopped shopping. Somehow this was missed by the Canadian Government, Real Estate groups and housing economists around the globe. Proof of this reality can now be found in tracking the outcomes pre and post May 19th, 2013 on the Average Selling Prices of Homes across Canada.
Prior to May 2013, Canada had experienced 18 consecutive months (October 2011 through April 2013) of a stalled National Average Selling Price but immediately commencing in June 2013 or less than 45 days after this call was made, Average Selling Prices began to soar. In the following 18 months ( June 2013 through November 2014) the Average Selling Price soared an additional 12%, culminating with a yearly Average Selling Price for 2014 of $408,157.
Putting this 12% 18 month gain in perspective, it took 60 months ( between April 2008 and April 2013) to see a 16.5% gain take place in Canada, a time when first time buyers were still active and proportionally represented in the sales mix.
What Governments and Housing economists did not understand is that the vast majority of this 12 % increase was being caused simply from fewer and fewer initial acquisitions being part of the monthly Average Selling Price mix. Falling interest rates not only supported this swing in mix but actually increased the magnitude of this swing. The fact is that the Initial Acquisition Threshold Nationally still sits at $240,000.
We are now a full 21 months after this market call was made and now the full consequence of a market that lacks its most basic underpinning is coming home to roost. This change that is now ongoing is not the result of falling oil prices or of an Arctic Freeze or some regional flood but rather the natural way all Realty Markets evolve. No Initial Acquisitions means No Market and the Market did in fact die on May 19th, 2013.
Had Governments taken appropriate measures to refine their mix of new homes being built in local communities much of this unnecessary yet now ongoing correction likely could have been stopped. Structuring the permitting process to remove bottle necks caused by inappropriate types of homes being build could have removed the bottle neck that caused affordability to crumble and the market to end.
If you would like access to our market intelligence and Canada's only accurate housing forecast models email us at [email protected] .
On May 19th, 2013 RKRC made the Call that the Canadian real estate market had just died ( reported/recorded on the GreaterFool.ca ) as this signaled the time that on mass first time buyers ended their engagement with the housing market. The Initial Acquisition price for a home in Canada had finally bypassed either the willingness or the capacity of what that class of buyers would pay, so they lost interest and stopped shopping. Somehow this was missed by the Canadian Government, Real Estate groups and housing economists around the globe. Proof of this reality can now be found in tracking the outcomes pre and post May 19th, 2013 on the Average Selling Prices of Homes across Canada.
Prior to May 2013, Canada had experienced 18 consecutive months (October 2011 through April 2013) of a stalled National Average Selling Price but immediately commencing in June 2013 or less than 45 days after this call was made, Average Selling Prices began to soar. In the following 18 months ( June 2013 through November 2014) the Average Selling Price soared an additional 12%, culminating with a yearly Average Selling Price for 2014 of $408,157.
Putting this 12% 18 month gain in perspective, it took 60 months ( between April 2008 and April 2013) to see a 16.5% gain take place in Canada, a time when first time buyers were still active and proportionally represented in the sales mix.
What Governments and Housing economists did not understand is that the vast majority of this 12 % increase was being caused simply from fewer and fewer initial acquisitions being part of the monthly Average Selling Price mix. Falling interest rates not only supported this swing in mix but actually increased the magnitude of this swing. The fact is that the Initial Acquisition Threshold Nationally still sits at $240,000.
We are now a full 21 months after this market call was made and now the full consequence of a market that lacks its most basic underpinning is coming home to roost. This change that is now ongoing is not the result of falling oil prices or of an Arctic Freeze or some regional flood but rather the natural way all Realty Markets evolve. No Initial Acquisitions means No Market and the Market did in fact die on May 19th, 2013.
Had Governments taken appropriate measures to refine their mix of new homes being built in local communities much of this unnecessary yet now ongoing correction likely could have been stopped. Structuring the permitting process to remove bottle necks caused by inappropriate types of homes being build could have removed the bottle neck that caused affordability to crumble and the market to end.
If you would like access to our market intelligence and Canada's only accurate housing forecast models email us at [email protected] .
Four Key December Homes Sold Targets to Watch
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Vancouver CMA
December Sales Target 2,354 (+20.5% vs Dec 2013) Now Reported 2115 |
Calgary CMA
December Sales Target 1,089 (-7.0% vs Dec 2013) Now Reported 1083 |
TREB GTA
December Sales Target 3,801 (-6.3% vs Dec 2013) Now Reported 4446 |
Montreal CMA
December Sales Target 1,970 (-2.9% vs Dec 2013) |
Why Targets matter?
The speed and magnitude of which a Contraction takes hold is one of the key predictors of price change as it impacts the ability of the existing market valued inventory to be absorbed at market value pricing. In the same way a rapid and broad Expansion places immediate upward pressure on prices so to does an equally rapid and broad Contraction cause the reverse to occur.
Monthly Targets are also used in all calculations tied to Absorption Rates and thus any measures that are dependent on Absorption Rates as one of their variables are only as accurate as the Targets used.
The speed and magnitude of which a Contraction takes hold is one of the key predictors of price change as it impacts the ability of the existing market valued inventory to be absorbed at market value pricing. In the same way a rapid and broad Expansion places immediate upward pressure on prices so to does an equally rapid and broad Contraction cause the reverse to occur.
Monthly Targets are also used in all calculations tied to Absorption Rates and thus any measures that are dependent on Absorption Rates as one of their variables are only as accurate as the Targets used.
Latest Consumer News released 7/12/2014
Confirmed- Canada, Nationally has entered its next Period of Contraction in Home Sales (read more)
Confirmed- Canada, Nationally has entered its next Period of Contraction in Home Sales (read more)
A Realty Market is either accelerating or decelerating and unlike the Stock Market it cannot rapidly transition from a buyers market to sellers market in a single day nor can it reverse it's current direction with similar rapidity. Since 1982 every swing in the Realty Market has been recorded through it's Sales Cycles. Even in periods of great economic turmoil like those encountered during the Great Recession, the peak of the Sales Cycle that occurred on November 2007 had been predicted in measures in the Sales Cycle earlier that August, as were the following 18 months of declining sales predicted before the market turned once again. Recently beginning in May of 2009 Canada has passed through 2 full Sales Cycles and is currently trending to the peak of it's 3rd as we await this month's totals.
Using the Sales Cycle to measure whether a market is accelerating or decelerating, eliminates the influence of any seasonal anomalies or commonalities and even those caused by flawed sales data, allowing for the "purest" measure of the rate of change in a Realty Market to be recorded. Sales Cycles turn in a single month and have forward predicted every single swing in the market since 1982 with 100% accuracy. Like a Roller Coaster, Sales Cycles swing from one extreme to another while always remaining on track meeting the next turn in the market.
Using the Sales Cycle to measure whether a market is accelerating or decelerating, eliminates the influence of any seasonal anomalies or commonalities and even those caused by flawed sales data, allowing for the "purest" measure of the rate of change in a Realty Market to be recorded. Sales Cycles turn in a single month and have forward predicted every single swing in the market since 1982 with 100% accuracy. Like a Roller Coaster, Sales Cycles swing from one extreme to another while always remaining on track meeting the next turn in the market.
Nov 4th. Simplified by removing the momentum coefficient, allowing readers to easily compare against Oct. sales volumes now being reported.
Any October Volumes that are reported lower than what is posted here (in red), means that market is continuing to decelerate towards it's peak.
Canada-42,218, Toronto-9246, Montreal-2597, Vancouver-3558, Fraser Valley-1478, Calgary-2271
Oct 24th. Check your data: October Month End Sales Targets in key CMAs to Maintain current momentum.
Anything reported below these volumes, means than market is decelerating at a more rapid rate than previous rate of change was progressing.
Toronto-8165, Calgary-1872, Vancouver-2793, Fraser Valley-1419, Canada-39130
Any October Volumes that are reported lower than what is posted here (in red), means that market is continuing to decelerate towards it's peak.
Canada-42,218, Toronto-9246, Montreal-2597, Vancouver-3558, Fraser Valley-1478, Calgary-2271
Oct 24th. Check your data: October Month End Sales Targets in key CMAs to Maintain current momentum.
Anything reported below these volumes, means than market is decelerating at a more rapid rate than previous rate of change was progressing.
Toronto-8165, Calgary-1872, Vancouver-2793, Fraser Valley-1419, Canada-39130
We consistently out forecast the competition even when a Sales Cycle reverses in a single month.
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April 30th Forecasts:
Number of Sales in Canada for 2014 RKRC - 477,500 (trending higher) CMHC - 457,900 Number of Sales in Toronto for 2014 RKRC - 91,800 (trending higher) CMHC - 87,000 Number of Sales in Vancouver for 2014 RKRC - 36,300 (trending higher) CMHC - 30,000 |
July 16th Forecasts:
Number of Sales in Canada for 2014 RKRC - 483,500 (just turned) CMHC - 463,600 Number of Sales in Toronto for 2014 RKRC - 94.600 (just turned) CMHC - 90,000 Number of Sales in Vancouver for 2014 RKRC - 36,500 ( just turned) CMHC - 31,000 |
October 15th Forecasts:
Number of Sales in Canada for 2014 RKRC - 481,500 (trending lower) CMHC - 476,100 (released Oct 30th) Number of Sales in Toronto for 2014 RKRC - 93,300 (trending lower) CMHC - 92,500 (released Oct 30th) Number of Sales in Vancouver for 2014 RKRC - 33,900 (trending lower) CMHC - 32,800 (released Oct 30th) |
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March 15th Forecasts:
Number of Sales in Canada for 2014 RKRC - 469,000 (trending higher) CREA - 463,700 |
June 15th Forecasts:
Number of Sales in Canada for 2014 RKRC - 478,500 (trending higher) CREA - 463,400 |
September 15th Forecasts:
Number of Sales in Canada for 2014 RKRC - 480,000 (trending lower) CREA - 475,000 |
Source- RKRC, CMHC, CREA
Latest National indicators (example for n/s)Housing Stock Canada estimate (12 mth liquid)
(Jan 2014) 10,847,424
Annual Housing Stock Growth: (trending)
(July 2014) 1.34%
Year to Date Equity Gain from Stock @ HVI
(Aug 2014) $181.1 Billion CDN
Annual Housing Stock Trading Rate: (trending)
(Aug 2014) 4.48%
28 Day Absorption Rate: (national)
(Aug 2014) 34.92%
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The Weekly Update (example for non-subscribers)Week of August 31st thru Sept 6th
Blink your eyes and over 5% of the homes that were available to be purchased on August 31 were removed from market in the following 3 days because they failed to sell before school started back. This is what happens when the sales chain is not being supported with enough new first time buyers entering the market as has been the case throughout the first 8 months of 2014. Failure rates for all Canadians looking to sell are now just under one in two. While the average selling price continues to record an increased concentration of sales taking place in areas of the country were homes are priced higher than what the Canadian median home is valued at and towards homes that are less than 20 years old, the average Canadian home saw it's real value drop by about $2,500 in August as Canadians in most parts of the country show little interest in moving. The greatest risk exposure for buyers remains Ontario's Golden Horseshoe which extends around the tip of Lake Ontario and much further than just the GTA. While Calgary CMA remained the #2 Seller friendly market in Canada, the Hamilton-Burlington CMA and Northern Ontario's Thunder Bay CMA ranked 1 and 3 respectively. |
Market Forecasts and Subscription Service Launched July 14th, 2014 Click Here
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In partnership we are pleased to announce the launch of the Home Value Index™,
Canada's most accurate measure of change in the value of the average Canadian home. |
Ross Kay was to be awarded 2013 Burlington's Best.
Community Service Award, awarded to Ross Kay
An individual who volunteered in the areas of public relations, marketing, communications or special events that promoted Burlington’s sense of community.
History
Established in February 1965 the Planning Committee is a citizens committee reporting to City Council through the Community Services Committee.
Awards Mandate
To recognize citizens of Burlington who have brought favourable publicity and honour to the City of Burlington and to increase awareness of the committee in order that all citizens of Burlington have the opportunity to be recognized for their achievements.
Community Service Award, awarded to Ross Kay
An individual who volunteered in the areas of public relations, marketing, communications or special events that promoted Burlington’s sense of community.
History
Established in February 1965 the Planning Committee is a citizens committee reporting to City Council through the Community Services Committee.
Awards Mandate
To recognize citizens of Burlington who have brought favourable publicity and honour to the City of Burlington and to increase awareness of the committee in order that all citizens of Burlington have the opportunity to be recognized for their achievements.
