1/ Maybe @OSFICanada can comment on the emerging practice of "blanket appraisals" by big banks on new condos. I've heard this from many in the industry and verified it myself via land registry data on some new builds.

@SteveSaretsky discusses it here

2/ The idea is that some condos that were bought preconstruction at peak pricing AND at substantial premium to resale at the time are completing today and are deeply underwater.

eg. Purchased for $700k preconstruction but comp sales today are more like $550k

THREAD: What's going on with these crazy Canadian jobs numbers?

Here's what I think people are missing. Start with some key lines from the report today:

"Notable employment growth among the group that includes non-permanent residents."

1/ Further:

"On a year-over-year basis, employment for those who were not born in Canada and have never been a landed immigrant was up 13.3% in Jan, compared with growth in total employment of 2.8%."

So what we have here is a boom in employment among non-permanent residents

2/

The recent undercover work by @cbcmarketplace to expose mortgage fraud in Canada raised questions around how these bad actors were able to operate so brazenly. Now a new audit of @RECOhelps raises further doubts that self-governance is working. 1/ cbc.ca/news/marketpla… Some takeaways from the incredibly scathing Auditor General's report:

auditor.on.ca/en/content/ann…

2/

Thoughts on trigger rates.

Variable rate mortgages have surged in popularity, accounting for over half of new originations in the past year and now represent 1/3 of all outstanding mortgage debt.

BUT, up to 80% of those variable rate mortgages still have static payments

1/ Static payment mortgages work by adjusting the share of the payment that is applied to principal. Canada does not allow for negative amortization, so once interest expenses consumer the entire payment, it "triggers" a payment reset.

2/

THREAD: According to new data from the @bankofcanada, a major source of incremental housing demand in Canada has come from "investors"....loosely defined by the BoC as buyers who already own at least one other property. 1/ The share is likely even higher. From the BoC's own footnotes. 2/

THREAD: House prices in Toronto have been increasing on average by nearly 4% per MONTH for the past 6 months. Bidding wars have been so insane that to win, you basically have to bid 10-15% (or more) above any recent comparable. 1/ This would normally cause issues with appraisals but with prices rising so quickly, buyers just push back the appraisal as close to the closing date as possible and let the comparables "catch up" to the sale price. 2/

SUPER THREAD-
Crazy Canadian home sales

Kicking it off, from @REWoman, a $1,000,000 or 120% gain in 1 year in Whitby. Some reno work done, but damn!

https://twitter.com/REWoman/status/1488984942923112452

Solid 50% gain in 1 year in Stouffville

https://twitter.com/PeterofRecord/status/1489227463758602243

I don't get the people arguing that we don't have a housing supply issue in Canada. Look, I'm very VERY sympathetic to the idea that we have a real problem with speculation, money laundering, and illicit capital flows which are artificially goosing demand. BUT.... 1/ ...Think of Canadian housing right now as a low float stock where incremental demand has massive effect on marginal pricing. How low stock? By my math, active MLS listings hit a fresh 20-yr low last month across the country. 2/

Thread on Cdn immigration policy. Obligatory recognition that yes, we need strong immigration based on trends in natural increase. But still, I really dislike that we can't have a discussion around aspects of immigration policy without being side-eyed by all the wokesters. 1/ I contend that allowing population growth to run up to nearly 600k y/y in 2019 primarily due to surge in non-permanent residents (mostly international students) without an accompanying buy-in from municipalities on how to accommodate that growth was an enormous policy failure. 2/

1/ A thread here on where I think housing is going as we head into the spring. As I said in a prev tweet, I think we'll see 20% y/y in the MLS HPI by the summer which would put us at 50-yr highs in terms of REAL house price appreciation 2/ The reality is that inventory is remarkably low right now...at least at 30-yr lows. Lots of theories about what's causing this, but note that it's not a new phenomenon. It's been trending down sharply since 2019.

THREAD:
1/ I've been thinking a lot about population growth in Canada. Scary thought, but there's a non-trivial chance that we see outright population declines in coming quarters, something we've never seen before. Here's the math... 2/ Q4 nominal population y/y was ~560k, of which ~96k was natural increase, 196k was net non-permanent residents (NPRs), and ~268k was net international migration.

Natural increase is relatively stable regardless of pandemic, so pencil that in at ~95-100k y/y.

Thread coming. Some thoughts on this case --> 'Breathtaking': Fake mortgage broker case reveals widespread problems | CBC News cbc.ca/news/canada/br… Here's a guy who originated half a billion in questionable/sketchy mortgages, some of them insured. Guy pocketed $5MM in commissions. He will do NO jail time and will likely only forfeit a portion of those commissions.