History confirms when when this happens prices that when up will come down. “See California, Florida, Japan, Dubai, Greece, Ireland, Spain et al”

VANCOUVER average single family detached prices in July 2013 ticked down 0.1% M/M and remain 13.6% ($144,300) below their peak set last April 2012 (Vancouver Chart). Vancouver combined residential prices are down 2.3% Y/Y (Scorecard) on booming sales up 40.5% Y/Y. Average strata units continue to trade at 3Q 2007 prices which drifted lower M/M on bullish sales. Prime location inventory remains static (see the Bubble Deflator)

If you are thinking of buying a Vancouver Condo as an Investment, see my Vancouver Condo Yield Case Study and now that you have the July data, where do you think Vancouver SFD prices will be one year hence? VOTE HERE.
 
CALGARY average detached house prices in July 2013 met with resistance and ticked down 0.4% M/M after the June peak (Calgary Chart) while townhouse prices dropped 4.1% M/M and condo prices ticked up 0.3% M/M. Combined residential sales slumped M/M but remain elevated Y/Y especially in the condo sector and with red ink all over the inventory levels (Scorecard) as migrant workers and flood victims compete for housing. Alberta remains a different country with respect to earnings that continue break record highs per capita.

The sentiment in Calgary is the least bearish of the 3 markets polled with only 22% of the survey thinking Calgary SFD prices will be 20% lower in 12 months. What do you think? VOTE HERE.

EDMONTON average detached house prices in July 2013 continue to be held back at resistance (Canada Chart), while townhouse and condo prices dropped 2.5% and 7.4% M/M. While Calgary has negative combined M/M residential sales, Edmonton sales remain in an uptrend (Scorecard). But bidders have yet to break the May 2007 peak SFD price (Plunge-O-Meter) which remains 3.7% below the high.
 
TORONTO average detached house prices for the GTA in July 2013 dropped 3.2% M/M and are 4.8% below the trifecta breakout highs set in May (Toronto Chart). Combined residential sales are off 5.7% M/M with average SFD sales plunging 9.2% M/M. The gap between Vancouver and Toronto housing prices (Vancouver vs Toronto) widened to 43% more expensive in Vancouver. The GTA may have appeal to the HNWI as a “safe” haven but the media does not rate Toronto as investment grade.

Polled sentiment here continues to suggest that prices will be down another 20% in 12 months. What do you think? VOTE HERE.
 
OTTAWA average detached house prices are not available, instead the chart on this site reflects Ottawa’s average combined residential prices. OREB’s report is sparse and opaque and the CMHC, records for Ottawa inventory remain one month lagging. In July 2013 Ottawa combined residential prices ticked up 0.1% M/M but remain 3.2% below the peak price set in April (Scorecard). Sales plunged 16% M/M and are down 2% Y/Y.

MONTREAL median (not average) detached house prices in July 2013 ticked down 0.7% M/M and are that much below the record high set in May-June (Canada Chart). Prices are being held back by ever decreasing sales and thinning participants with combined residential sales down 20% M/M and 3% Y/Y. Condo sales plunged 24.4% M/M and are down 13.9% Y/Y (Scorecard). In the 2011 Census, Montreal added 6.4% more dwelling units while only adding 5.2% more people. There is no shortage of housing, but there is a shortage of earnings; the Province of Quebec ranks 6th in Canada’s 10 provinces for earnings and printed an unemployment rate of 7.7% in May (0.4% above Ontario’s).

About Brian Ripley’s Canadian Housing Price Charts 

As the markets are propelled higher by the successive interventions of the Federal Reserve it is hard not to think that the current rise will continue indefinitely. The most common belief is currently that even if the Fed begins to “taper” their purchases the resurgence of economic growth will continue to propel stocks higher even in the face of higher interest rates. The financial world has finally achieved a “utopian” state where there is no longer investment risk in any asset class -because if it stumbles the central banks of the world will be there to catch them.

1) You are a speculator – not an investor

2) Asset allocation is the key to winning the “long game”

3) You can’t “buy low” if you don’t “sell high” 

4) No investment discipline works all the time – however, sticking to discipline works always

5) Losing capital is destructive. Missing an opportunity is not.

6) You most valuable, and irreplaceable commodity, is “time.”

7) Don’t mistake a “cyclical trend” as an “infinite direction”

8) If you think you have it figured out – sell everything.

9) Being a contrarian is tough, lonely and generally right.

10) Benchmarking performance only benefits Wall Street

The Canadian labour market took a turn for the worse last month, shedding 39,400 net jobs that included a record loss in the public sector offsetting gains among private employers.

Unexpected by some yes, but should it have been?

Economists talk all the time about how the Canadian economy is resource driven and to a large extent, this is true. With commodities including base and pressure metals and oil & gas slumping for much of the first half of 2013, is it any surprise job creation ran into significant headwinds.

For those who argue that crude has recently been on a strong run, remember that the data is backward looking; and that the Western Canadian Sedimentary Basin, which produces much of Canada’s oil, still faces bottlenecks that prevent producers from realizing quoted WTI prices. Furthermore, natural gas continues to trade at the low end of its range over the past 5-years reducing CAPEX and thus, job creation near term.

Breaking down the headline numbers further – six of 10 Canadian provinces lost workers with Quebec’s 30,400 setbacks the deepest fall-off. The big shock, according to many media outlets, was that Statistics Canada reported a record loss of 74,000 public service jobs and a disproportionate number of those situated in Quebec. Of course, half of these public servants were lost to prison – I say that in jest of course, or do I?

But seriously, is it such a bad thing we are shedding in the public sector and adding in private sector? With the state of government indebtedness across the developed world, this is likely the only viable path.

It was the second consecutive month that Canada’s economy shed jobs — although June’s loss of 400 net jobs was only technically negative.

Last month’s decline lifted the official unemployment rate to 7.2% in July, one-tenth of a point higher than in June and May and matching the level for April and March. The rate stood at 7.0% in the first two months of 2013.

The bottom line is that we should never read too much into one-month of statistics on anything. It does appear the Canadian economy continues to face headwinds. The stock market, which has been treading water in Canada for the better part of two years, has anticipated this.

Fortunately, from an investment perspective, the first half of 2013 has not been a lost period. In fact, we have seen strong gains in the technology segment with both our top hardware and software Focus BUYs hitting new all-time highs in the past 2-weeks, and increasing their dividends once again in 2013.

The recent upturn in crude prices as well as the narrowing of the gap for Western Canadian oil producers has lead to optimism in the oil patch for a better second half of 2013 and the segment has shown strength in the past few months after a dismal 12-months.

As we continue to believe the broader markets are not cheap, it is these select situations and pockets of strength in the market that will keep our attention in the near term.

Just click HERE or HERE to get to all of these auctions that are currently active.