- Toronto, Vancouver home prices surge
- U.S. jobs report disappoints
- Canada's trade gap narrows
- Video: Do 'smart' drugs belong in the office?
Home prices surge
Here are three key numbers and two key words to ponder today:
The first stat represents the annual surge in the MLS price of a detached Toronto home, released today.
The second is the rise in the benchmark price for a detached house in Vancouver.
The third: Canada’s housing market compared to others, as in “We’re No. 1.”
The first key word represents “bubble,” with BMO Nesbitt Burns questioning if that’s the right description for Vancouver.
And the second is how BMO sees Vancouver prices.
All of this, of course, comes amid mounting concerns over the frothy Toronto and Vancouver real estate markets, with both Bank of Nova Scotia and the Organization for Economic Co-operation and Development calling this week for government intervention.
First, Toronto: Numbers released this morning showed home sales in the Toronto area climbed 10.6 per cent in May from a year earlier.
But the rise in sales pales in comparison to the gain in prices, according to the statistics from the Toronto Real Estate Board.
The cost of a detached home, as measured by the MLS home price index, surged 17.5 per cent. In the city core, the MLS price for a detached stands at almost $1.3-million. In the surrounding regions, it’s almost $900,000.
And a couple of additional stats: New listings fell 6.4 per cent, and active listings a hefty 30.4 per cent.
“While the record number of home sales through the first five months of 2016 is not necessarily surprising, it does sometimes mask the larger story in the GTA: the shortage of listings, which has resulted in strong upward pressure on home prices,” TREB president Mark McLean said in announcing the numbers today.
As The Globe and Mail’s Brent Jang reports, Vancouver’s market is also scorching.
More so than Toronto’s, in fact, which prompted BMO senior economist Robert Kavcic to point to the phenomenon we dare not name.
And he didn’t, choosing instead to question whether the city is exhibiting signs of “the B-word.” By which, of course, he meant bubble.
Numbers released yesterday showed Vancouver sales climbing 17.6 per cent, with the benchmark price soaring 29.7 per cent from a year earlier.
And then there’s the growth in a detached home: 37 per cent.
“Price growth started to go parabolic in early 2015 after oil prices went off the rails and the Bank of Canada cut rates,” Mr. Kavcic said in a research note, reminding clients that BMO warned then of surging prices in Vancouver and Toronto.
“Two past episodes in Canada that most would associate with the B-word - Calgary in 2006 and Toronto in the late ‘80s - saw price growth push through 40 per cent year over year,” he added.
“We know for sure both of those episodes ended poorly.”
According to new measures released yesterday by Bank of Nova Scotia, the rise in real home prices in Canada is tops in the world, followed by Sweden, Colombia, Ireland, Britain, Australia, Mexico, the U.S. and Germany.
U.S. jobs report disappoints
The U.S. economy created just 38,000 jobs in May, far fewer than expected and held down by a strike against Verizon.
At the same time, according to government numbers released today, the unemployment rate edged down to 4.7 per cent from 5 per cent.
While that may be the lowest rate since late 2007, the move was at least in part driven by the fact that hundreds of thousands of people quit searching for jobs, and thus no longer counted.
Trade gap narrows
There’s slightly better news, however, on the trade front.
Canada’s trade deficit narrowed in April to $2.9-billion, from $3.2-billion a month earlier, as exports climbed at a faster pace than imports.
Exports rose 1.5 per cent, and imports 0.9 per cent, Statistics Canada said today.
That followed two months of “sharp” declines in Canadian exports, the agency noted.