After climbing to unprecedented heights year after year, the housing markets in Canada have entered a new phase where housing sales and prices are showing higher volatility. It started with Edmonton where a drop in oil prices was followed by a drop in housing sales and prices. Then came Vancouver where a new 15% tax imposed on foreign homebuyers was immediately followed by a steep decline in housing sales and prices. The last to join the uncertainty bandwagon is the Greater Toronto Area where housing prices have declined since April when the Ontario government introduced a buffet of new regulations including a tax on foreign homebuyers.
The rapid, yet expected, increase in housing market volatility has stopped many armchair pundits in their tracks. Projecting upward trends is far easier than explaining the direction of a volatility stricken market. The task becomes even more difficult when consumers’ behaviour diverts from an expected rational behaviour. We were told that higher prices have forced many out of the market. Yet, sales increased each month. Now that prices are sliding, suddenly buyers have disappeared. We can’t find pundits to explain the market’s behaviour.
With every passing month, the uncertainty about housing markets worsens. At the same time, the demand for informed and evidence-based commentary remains largely unmet in most media outlets. The usual commentary is by talking heads who comment indiscriminately on all subjects. The business page coverage in the news media is stakeholder driven where press releases from governments and the industry morph into stories about property markets. The introduction of regular, serious, and timely commentary on property markets are poised to attract large number of readers and generate significant new web traffic and ad revenue.