Canada’s Majestic Housing Bubble Deflates

Robert Shiller writes: sentiment is largely shaped by the news media.     https://wolfstreet.c...a-hype-u-turns/

“Metro Vancouver housing market sets new sales record in 2015 as prices keep climbing” – Financial Post, January 2016

“Unconditional offers are new normal in Vancouver real estate market” – Globe & Mail, February 2016″

“Vancouver area benchmark house price now $1.4M, up 30% in 1 year” – CBC News, May 2016

But as Shiller writes, all mania’s eventually come to an end, and the media plays an equal role in compounding the role of public sentiment in the opposite direction.

“Buyers retreat from Metro Vancouver housing market over new taxes” – Vancouver Sun, September 2018

“Vancouver Real Estate Slowdown Expected to Persists in 2019 As Cooling Measures Take Effect”- Globe & Mail, December 2018

“Metro Vancouver housing sales hit nearly 20 year low”- January, 2019

If you want to know how the Ruling Class is faring, keep an eye on the price of their Real Estate.  

Prime Central London, one of London’s most expensive areas and once the hotbed of London’s breath-taking property bubble, is now in a deep morass.  

“Fundamentally, the dynamics in PCL reported over the last couple of years have regrettably not changed. If anything, they have deteriorated further.”

“Most investors are aware of the unprecedented difficulties faced by Prime Central London residential over recent years and recognize the remarkably difficult trading conditions that the Fund has had to endure.”

The letter mentions the collapse in share prices over the past four years of two real estate agencies: Foxtons down 87.4%; and Countrywide, the largest agency in the UK with over 10,000 employees down by 98.5% (we covered this fiasco).

“Its difficult to open a paper these days without reading about the parlous state of the residential market in PCL.”