Post Category: Research
January 25, 2016
Mortgage Companies – 2016 Outlook

Slim Pickings Despite Recent Sell-Off: This time last year, we acknowledged that the outlook for the Canadian housing market had changed dramatically on the back of a 50% decline in oil prices from their 2014 peak. We highlighted the adverse implications for the Alberta market in particular. Over the past 12 months oil prices have slid by another 35%, compounding the deterioration in the economic outlook. We have seen fit to make further downward adjustments to the outlooks for the mortgage finance companies in our coverage universe.

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Post Category: Research
January 13, 2016
Economic News – Canada: House prices up 6.2% in 2015, with quite a regional contrast

OPINION: For Canada as a whole, 2015 saw the largest house price increase in four years (top chart), but only four regional markets were the drivers of that performance. At the other end of the spectrum, the collapse in oil prices has translated into house price deflation in Calgary and Edmonton, with the remaining five markets showing little price growth if not declines (middle chart). Even in Vancouver and Toronto, there was a dichotomy in the market, with condos prices up roughly 6% in 2015, while prices for other types of dwellings surged 15.8% in Vancouver and 10.9% in Toronto (bottom chart). Some believe that the story in Vancouver and Toronto is all about speculation and demand from foreigners, and nothing is fundamental. Data tell a different story. Indeed, fundamentals are playing a role, judging from job growth over the last 12 months of no less than 4.9% in Toronto and 4.0% in Vancouver. Looking ahead, deteriorating economic conditions in Canada should translate in softer job creation in the hot markets, while weak resale markets should persist elsewhere. Under these circumstances, we expect a significant deceleration in the national house price index growth rate in 2016.

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For further information about upcoming reports, please contact:

Kan Zhu
Leader, Data & Advisory Solutions
Teranet Inc.
Phone: 416-360-8863 x 2270
Michael Pertsis
Director, Mortgage Derivatives
National Bank Financial
Phone: 416.869.7124