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CMHC releases Sept. housing starts data "The annual pace of Canadian housing starts fell to their lowest level in nearly two years in September. Canada Mortgage and Housing Corp. says the seasonally adjusted annual rate came in at 188,683 units last month, down from 198,843 in August." -by Canadian Press

OREA joins chorus calling for stress test's annulment "Ongoing negotiations for a new North American Free Trade Agreement highlight a looming crisis for Canadian homeowners." -by Neil Sharma

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Canada among world’s four riskiest housing markets by Bloomberg 13 Sep 2018 SHARE Canada among world’s four riskiest housing markets... by Michael Heath Housing market dangers are especially acute in Australia, Hong Kong, Canada and Sweden, Oxford Economics said, noting this has historically posed a threat to economic activity. In all four, valuations are very elevated, there has been a lengthy housing boom, debt levels are high and there is a significant share of floating rate debt, Adam Slater, lead economist at Oxford, said in a research note. On the positive side, it notes risks are relatively limited in key markets like the U.S., Germany, France, China and Japan. In addition, across most economies there has been no significant recent rise in mortgage rates, which have even fallen in some cases. So, the classic ‘trigger’ for house price declines is largely absent, Slater said. However, rising rates are not strictly necessary for prices to start falling. House prices are falling in Australia, down almost 3 percent in the year through August in major cities, and 5.6 percent in the Sydney market. Meanwhile, three of the nation’s four major banks raised mortgage rates in recent weeks, blaming higher funding costs. The increases came even as the central bank leaves official rates at a record low. Oxford said it compared markets across OECD countries from 1970 to 2013 and found a clear negative relationship. Where valuations had risen 35 percent or more above the long-term average over that period, real house prices fell 75 percent of the time over the following five years, it said. This points to many OECD countries seeing stagnant or negative real house price growth in the next few years: the scope for a further house price ‘melt-up’ in highly valued markets looks extremely limited, Slater said. Stretched valuations also matter because house price changes can have a significant impact on economic activity, Oxford said, citing a sample of 83 house price booms. It also found house prices tended to fall after booms, and often substantially. For the G7 countries, we find a positive relationship between consumer spending and real house prices from 1997, albeit possibly weakening in recent years, Slater said. Copyright Bloomberg News

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