As posted here on March 28, 2009, the CMHC Housing Analysis that had been released that week showed the number of completed (yet unsold) condo units in the Vancouver market has shot up to 2,391. The year before, in March 2008, the total was a lowly 1,384. More importantly it noted that there are 25,907 units under construction and due to come onto the market as the year moves along.
Granted, a large number of those units will have been 'pre-sold'. But it is clear that there will be a huge glut of inventory flooding the market this year. The real-estate-without-land market is massively overbuilt.
Logically that will continue to push prices down, won't it?
Not if you shill mortgages for a living.
On Monday TD Canada Trust released it's most recent "analysis" on the state of the market. Reading the hilights, it is hard to equate the word 'analysis' with what looks more like condo-hype advertising copy.
In a press release trumpeting the 2009 TD Canada Trust Condo Poll, TD gushes that "the perceptions of the condo market have improved significantly over 2008 with 44% of urban Canadians believing the current conditions have improved for buying a condo as an investment (versus 21% in 2008). Why? Respondents say it is a buyer's market and condo prices are declining. If they can't afford to buy one on their own, 43% are willing to consider a joint purchase with a friend or relative to make the condo purchase possible."
I wonder how they came to these conclusions?
It was exactly one year ago that the market was at it's absolute peak. Since then values have been steadily dropping.
Question: Do you think conditions have improved for buying a condo today, as an investment, as opposed to last year?
Kind of a no brainer answer, isn't it. Of course they have improved! Would you or I buy a condo today? Not a freaking chance.
You or I wouldn't buy because an already over-saturated market is about to be flooded with a massive amount of additional inventory. Perhaps that's why the TD Canada Trust poll only went from 21% in 2008 to 44% today. Even with such a jury-rigged question, only 44% of respondents would answer 'yes' to that loaded question.
The 'official' press release is filled with additional gems like, "while 44% of survey respondents believe the current conditions for buying an investment condo are better than a year ago, versus just 21% agreeing with that statement in 2008, the amount Canadians are willing to spend has remained consistent."
These kinds of weak surveys allow the mortgage division of Banks to leverage the 'good news' to shill their products under the guise of a news story.
After presenting a ream of similar contrived nuggets, Joan Dal Bianco - TD Canada Trust's vice-president of real estate secured lending - then gives the classic real estate sales pitch hook. "This is a good time to explore a condo purchase given that mortgage rates are very attractive right now and many condos have dropped significantly in price."
As a sales pamphlet, it is great advertising.
Dressed up a news and investment advice, it comes across as attempting to manipulate the herd mentality that created the housing bubble in the first place.
And that's what rankles.