埃德蒙顿华人社区-Edmonton China

 找回密码
 注册
查看: 1852|回复: 2

TD Bank:OVERPRICED AND OVERBUILT: CANADIAN HOUSING

[复制链接]
鲜花(0) 鸡蛋(0)
发表于 2009-4-8 15:01 | 显示全部楼层 |阅读模式
老杨团队,追求完美;客户至上,服务到位!
During Canada’s “Housing Boom”, which ran roughly7 _3 b( y/ X& _. H
from 2002 to 2008, unsustainable price increases drove: v8 B# I+ P- S( B& a2 U
unsustainable levels of building. Our view is that house- c' d; I/ ?4 {/ z- h5 J: B3 U
prices exceeded the value of housing that was justified by2 e3 A- q+ g5 a- |
fundamentals by approximately 9% nationwide. This
; k: |" [, w6 C- _' koverpricing compelled a level of residential construction* ^4 U7 ]1 f9 A1 z
that exceeded its fundamental-justified level by approximately
' Y1 B& [7 B2 m& w5 S/ F) E, N12%, an excess that was exaggerated in the past
" U# n  y6 W& H9 `: r8 Hthree years.
3 w1 a4 r: U3 }By “overpricing” we mean that prices detached from
7 q; |6 J. U" i& p" Y0 ?6 |their fundamentals, as witnessed by a steep erosion of
0 t( t( j* y7 X; Laffordability. The current unwinding of house prices reflects
/ o1 O, q) e& n2 P; O) A' Vboth a cyclical downturn and a return of house prices. A  f# W* b1 _+ p# s/ ~7 ^% j
to fundamentally justified levels.+ I6 J. Z8 n) E4 H) a- Y9 ~
We consider “overbuilding” of two forms: “demanddriven”
/ n7 p( C+ t, l& A& j! \3 M% Vwhere homebuyers buy up too many houses and
2 M% A# ^' u# Hthat this demand cannot be sustained; and “supply-driven”
; T) F, F' u" ~7 Zwhere builders accumulate excessive inventories. Although
* ^" P- e% m$ V+ `2 X7 [/ }there is evidence of both types, we contend that Canada’s
2 o* J9 a, r1 T7 P“overbuilding” was mainly of the first type, where) E* v7 @) o- q0 @' F; t" b" F
homebuyers pushed homebuilding to an unsustainable pitch
! r1 m& e8 E  W1 m  A' u+ N0 pthat is now being rapidly reined in.
% ]& p+ j7 V! B. CWhile most markets won’t face U.S.-style overhangs," s$ w9 ~" J( Y, I5 L! f4 ~! k
the construction of too many new homes over the boom
. j( p% s9 v! W3 H/ p+ ?* jmeans a deepened slump. This overbuilding will likely weigh1 r" K& f' c! T! I
on markets over the next few years. Even as Canada recovers& n  F- I; q: _
from the cyclical downturn, house price growth will
1 J3 K* U7 e+ jremain choppy and new residential construction will be1 H8 V. p' c$ V% U  B) {$ C
dampened, owing to this structural weakness. Construction
% Y# R- D) R- S5 Q: C  _! Ais now undershooting fundamentals and we expect this) F) F  P2 Z6 n
to persist over 2009 to 2011. We anticipate that nationwide
3 R2 Y4 N: @; K3 O+ Cresidential construction will fall further to around- Z$ o  B9 h: i* q& L
125,000 starts over 2009 with a trough around 115,000 units
  ]5 t& w) L( e- G9 V+ Win the fourth quarter.6 F2 v; c: g# x" S
To quantify the degree of overpricing and overbuilding,) s7 Z7 N8 B/ ]3 A# G
we first develop an empirical model, based on long-run
0 o7 g6 {$ z% T8 O) @6 dfundamentals of house prices and housing starts in each
3 v( v/ ]5 V, f& q3 Rprovince. Affordability is the key concept behind home0 b- o' P$ Y1 X3 X0 m+ R* l. Z
values since house prices should track incomes over the: {1 O; b. _- A" s
long-run. Since homebuilders build to meet demand, we
5 x6 P+ _" p1 u# \  aregard housing prices and household formation as the drivers
1 ^# }' M9 Q. y5 l7 ?* aof residential construction.5 S# [1 h; G2 i8 e9 i' b5 l
To examine the degree of overbuilding, we employ a% e0 d1 O5 b9 c5 ]; ~( r
“counter-factual,” asking what level of residential construction) ^/ m" U8 a+ N4 R# z/ A8 ~! `6 ]
would have occurred if housing had been priced
* Z  K- I, S8 o1 f6 i0 W( F9 d) Koptimally. We find that actual homebuilding exceeded this
' M9 `6 R& r4 I8 n8 }# A) qfundamental-justified level by about 12%. Although new. ]+ O' N1 m2 l2 {3 a9 _* @
units were being absorbed, homebuyers simply bought too" D* x$ ]1 M4 l" U& u
many houses at prices that exceeded fundamentals., A: A, P$ Q/ [& S
Regionally, we see the greatest strains on the Prairies,7 @# w! H5 |$ ?0 H2 r+ r. M' @& P
where housing demand will further contract under waning
: Z4 Y) |* \& t3 @population inflows. Saskatoon, Calgary and Edmonton are% g+ X2 s( X! `" V7 n0 `( e
already witnessing surges in their unsold new homes at the4 ]" u, L. e/ S+ D$ w
very time that the resale market has swung into strong7 o3 g+ T/ N6 a/ B+ \: R
buyers’ territory. Homebuilding in the Atlantic provinces1 @: X" s8 t  d  O! p
has been relatively balanced but, while not plagued by structural
$ e, v7 a+ ]2 Z9 Lweakness, will be singed by the downturn nonetheless.  _4 Z7 k# r8 ?8 _% }
Québec shows signs of strain – especially given the( y5 j# S  [7 q
strange accumulation of unabsorbed multiples on l’Île de5 O- i! H! ~/ o  O
Montréal – but recent building has been relatively balanced,1 f6 v9 W: V  G/ H4 j. I+ ~' a
given the province’s history of under-building and low ownership
2 E6 X* C  T- J) `rates. While Ontario homebuilding will reel from a
% k6 Y% X" g4 a5 P! x& i7 N2 {+ Ycyclical downturn, the degree of structural weakness appears4 p7 M* h( L% U& W6 }
limited – with the important exception of the Toronto
; |2 y% [  i0 v& D: z% acondo market. Both in Toronto and Vancouver, historically; ]" y, o6 I4 h
high levels of apartment-style units presently under6 b$ f4 \* r  A* r
construction mean that record numbers of condos will
  l+ P2 Q' `" r8 v, l1 ureach completion during 2009. If absorption rates fall, as: E& J$ r: m' j% \& g1 y  W# u; [
cyclical factors would indicate, condo inventories could
2 E9 `5 M/ |3 U* H9 S9 T1 l& Ispike severely – particularly in Vancouver. However, while. ?1 f. j/ e$ q/ t  o, b
residential construction in B.C. will definitely droop, we* M: @8 M; P1 [$ a0 p& E" I- o
anticipate that the West Coast will continue to benefit from
; i  V3 P: y( n, g- U! Yinter-provincial and international migration over the coming
6 i3 d  i: ~) _* H3 D/ l3 [years, which, along with improvements in affordability,
+ R* Y' W! a6 J" }* A+ k: Owill alleviate some of the pressure from overbuilding.( o6 J% n5 l! z
OVERPRICED AND OVERBUILT: CANADIAN HOUSING
/ R. @& z6 {3 O2 g7 N0 GMARKET RETURNS TO FUNDAMENTALS
  v+ {3 \! m- i% PGrant Bishop, Economist
; f! d+ k8 Y, ]& P2 J, q416-982-8063. l8 Q+ Y* r$ c  w8 G  ?$ |
Pascal Gauthier, Economist
8 M8 _* N& s! z- J4 @; {' y, S416-944-5730
. S0 e! f& i$ s' R
& k$ W6 Y5 ?" K1 Y6 B. Z4 N: v/ Khttp://www.td.com/economics/special/gb0409_housing_exec.pdf
鲜花(52) 鸡蛋(0)
发表于 2009-4-8 20:39 | 显示全部楼层
您需要登录后才可以回帖 登录 | 注册

本版积分规则

联系我们|小黑屋|手机版|Archiver|埃德蒙顿中文网

GMT-7, 2026-4-23 22:09 , Processed in 0.099626 second(s), 13 queries , Gzip On, APC On.

Powered by Discuz! X3.4

Copyright © 2001-2021, Tencent Cloud.

快速回复 返回顶部 返回列表