A continued rebound in multiple U.S. housing markets as predicted, while Canadian housing markets are likely to endure a “potential lengthy period of price weakness,” according to a May 14 report by capital management firm Pacifica Partners Inc.
The report refers to Vancouver as Canada’s “bubbliest” city, largely because average single-family home sale prices are down 14% from their highs and average condominium prices are close to 2007 levels.
“Canadian markets of Vancouver, Toronto and Montreal have now all reversed bullish trends versus U.S. markets, which had been in place since December of 2005,” the report noted. “The only major exception [for a Canadian real-estate market] is Calgary, where home prices have continued their sideways move relative to U.S. home prices, which began in 2009.”
The report painted a bleak picture for Canada’s economic future, claiming that the country is widely viewed as being a commodity-dependent “one-trick pony.”
Analysts have tended to be bearish on the prospects for commodities given the weakened global economy and fears of a slowdown in Chinese economic growth.
“Canadian leading economic indicators are now falling behind U.S. leading indicators by the widest margin in over two decades,” the Pacifica report noted.
