Money Goldman Sachs Gives Canada 30% Chance Of A Housing Bust

00:21  18 may  2017
00:21  18 may  2017 Source:   Huffington Post Canada

Canada's housing boom has 30% chance of going bust, Goldman Sachs says

  Canada's housing boom has 30% chance of going bust, Goldman Sachs says U.S. investment bank Goldman Sachs says there's an almost one in three chance of Canada's housing market going bust in the near future. The warning comes with a fairly large proviso, however, in that the bank's view a housing "bust" is based on the equivalent of a house price decline of as little as five per cent. A larger correction is on the table but in Goldman's eyes, even a relatively minor drop of five per cent would qualify.

Overvalued houses and too much home construction mean Canada has a 30 -per-cent chance of a housing bust within two years, New York-based investment bank Goldman Sachs says in a new research note.

Canada is careering towards a sharp fall in house prices with ultralow interest rates taking their toll on the property market, Goldman Sachs reports. And if the ongoing housing boom is followed by a housing bust , the price decline can be quite significant given the excess supply of housing at that

Overvalued houses and too much home construction mean Canada has a 30-per-cent chance of a housing bust within two years, New York-based investment bank Goldman Sachs says in a new research note.

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4 Signs Toronto's Housing Bubble Has Started To Deflate

  4 Signs Toronto's Housing Bubble Has Started To Deflate It’s been more than a few years since Greater Toronto’s real estate professionals have felt disappointed with a spring selling season; in recent years the reaction has been closer to astonishment as the region hit one new record after another. But this spring is shaping up differently. But this spring is shaping up differently. Chalk it up to an unusually rainy season; or concerns about the provincial Liberals’ new housing rules; or the federal Liberals' new mortgage rules last fall; or maybe just plain old buyer exhaustion — but things are changing in Toronto’s (formerly?) red-hot housing market.

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[20: 30 ] Sport. Turkey brings back Ottoman sports to revive former glory. [20:21] World. New Zealand's housing market has a 40 per cent chance of going bust in the next two years, according to global investment bank Goldman Sachs .

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The report defines a “bust” as a decline in inflation-adjusted prices of five per cent or more. It looked at the housing markets in the G10 economies — the countries that use the 10 most commonly traded currencies in the world.

Among those countries, it found “house prices are most overvalued in New Zealand, followed by Canada, Sweden, Australia, and Norway.”

New Zealand and Sweden have the highest risk of a housing bust, at 35 to 40 per cent, followed by Canada at just above 30 per cent, the report forecast.

Canada, like a number of other countries in the study, has built too many new homes, the Goldman study concluded.

Notably, however, it said the overbuilding is not in Canada’s hottest markets -- the Toronto and Vancouver regions -- but primarily in Alberta and Saskatchewan, where demand for new homes slumped after the oil price collapse.

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Bloomberg with a piece on Goldman Sachs assessment on G10 housing markets. GS said there is about a 40 percent chance of a housing " bust " in New Zealand over the next two house prices in New Zealand appear the most over-valued, followed by Canada , Sweden, Australia and Norway.

Investment bank Goldman Sachs says there is a 40 per cent chance New Zealand will suffer a housing market " bust " in the next two years. It has put out a report that looks at housing markets in the G-10 countries, according to Bloomberg.

“We would stress that in the case of Canada — a focus for many investors at the moment — there are important regional disparities to keep in mind,” the report noted.

It found most of these countries with an elevated risk of a housing bust are seeing an explosion in consumer debt. Canada’s household debt reached a record high above 167 per cent of disposable income earlier this year.

But so far, that debt burden has been manageable thanks to record low interest rates, the Goldman report said.

“In general we do not expect imminent problems in G10 real estate markets, but current imbalances could exacerbate cyclical weakness down the road.”


Can Home Capital Group Inc. Stop the Bleeding? .
Home Capital Group Inc.'s (TSX:HCG) has agreed to sell $1.5 billion of mortgages to raise liquidity. While many consider this a prudent short-term move, is Home Capital still viable in the long run?On Tuesday, Home Capital announced that it will sell off the equivalent of approximately 10% of its mortgage book to the unnamed buyer in the form of newly generated mortgages and soon-to-be-renewed mortgages, rather than selling mortgages the company is holding on its balance sheet.

Source: http://ca.pressfrom.com/news/money/-28215-goldman-sachs-gives-canada-30-chance-of-a-housing-bust/

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