Canadian Real Estate Imploding?

Coming on the heels of weakness in Australian property markets, evidence is pouring in of a housing bust in the frozen north: Statistics Canada reports a 10.8% drop in building permits. In addition, home sales in June fell 30% in Vancouver and 42% in Calgary. These trends may be blips and reverse, but the sharpness of the drop mirrors the US experience in 2006. 

The commodity countries like Canada and Australia trade on Chinese growth. With China tightening, a fall is not surprising. Home sales in China itself were down 50% in May. More predictions are coming in of this tightening popping the Chinese housing bubble.  As Ambrose Evans-Pritchard reports:

Standard Chartered has told clients to prepare for a fall in property prices of up to 30pc in Beijing, Shanghai, Shenzen, and other large cities in China as the delayed effects of monetary tightening begin to bite.

Comments

[Roger D.]

The top in the Euro signals these real estate bubbles are or ready to burst. Not to mention a big leg down in stocks.

Roger D.

http://www.screencast.com/users/parisgnome/folders/Default/media/4936ac1d-aa66-4b1e-9ae6-1ae0677b79d0

[holier than thou]

Thanks Roger Prechter. It's so obvious now!

[holier than thou]

Thanks Roger Prechter. It's so obvious now!

[Whitebear]

http://www.yattermatters.com/real-estate/glib-thoughts

How do you make of this then? Mind you this is quite recent. If China's real estate market is really as dire as the media depicted, how come those Chinese are bringing bag of money to buy up the high-end of the market in Vancouver then? I will show you some real transactions later on to prove to you that the high-end market in Vancouver (Vancouver West side) is still scorching hot.

[Whitebear]

Plus, the link that referred to the Chinese real estate slowing down is already 2 months ago. You just need to look at how Hong Kong market cooled down a bit from March till May and has boiled up again since June.

http://hk.centanet.com/icms/attachmentDownload.aspx?download/281-26391-22019/L1.JPG
Transactions 2010 1H for real estate > 10M HK$

http://www.centadata.com/cci/cci.htm
Housing index in Hong Kong. If you scroll down, you will see the list of estates priced in HK$/sq.feet (1 USD=7.78HK$)

Where is the so-called drop????

[?]

Whitebear,

You have to understand where the money is coming from. Many of the "rich" Chinese are well connected politically (or in some cases government servants). Their money is from "bribes" and other "favors" (grey area transactions). They go internationally to buy property everywhere to "clean" their money. That is the motivation.

[upstart]

DOW 2000 top to 2002 low = 144 weeks. 2007 high to next week = 144 weeks.

[Steven_737]

The primary scenario is that wave 4 of (1) is forming its y leg of w-x-y and needs to go to yesterdays high for a flat or to to reach the 50% retracement of wave 3 at ES 1043, SPX 1047.5 to form a zig-zag.

The alternate scenario
ES and NQ retraced 61% of yesterdays drop (that started at 10:15 EDT)
forming an a-b-c ;

this implies that wave ii of 5 of (1) is probably complete,
unless the price action is going to form a more complex w-x-y.

[Steven_737]

update

The alternate scenario
ES and NQ retraced 78% of yesterdays drop (that started at 10:15 EDT)
forming an a-b-c ;

[Roger D.]

http://www.screencast.com/users/parisgnome/folders/Default/media/65bc2f2c-3b34-4edc-ada1-cca53d0c194c

http://www.screencast.com/users/parisgnome/folders/Default/media/f31cfe1b-07c5-409e-9901-cd4b7562c1d8

[Rob]

In February, I sold my townhouse in Richmond, British Columbia, a suburb of Vancouver.

I interviewed 7 realtors, including 2 of the top realtors locally. The consensus of opinion was that housing prices were unsustainable and were likely to cool down. I sold my unit just before the start of the Winter Olympics. It was on the market for one week.

Looking at the Greater Vancouver Real Estate Board website, it appears prices may have peaked in April 2010 so I may have left some money on the table, but not much. In many areas, prices have surpassed the peak of May 2008. In June 2010, the average residential sales price in Greater Vancouver(over 2 million people)was Cdn$580,237. That is a composite of detached, attached (townhouses, duplexes) and condominiums.

It appears that the number of for sale signs is increasing quite a bit.

I am thankful I sold when I did and am currently renting an apartment.

[Michael]

Coal and iron ore stocks rallying again. Don't fight it. Just get long and ride it with an appropriate stop.

[Roger D.]

Rob,

I sold my house in June '05 and it is now down 45 pct from the top and still dropping. The new owner took out a mortagage at 6pct fixed for 750K from BAC. I'm glad I'm not in his shoes. Property bubbles are the kiss of death for any economy.

Roger D.

[Rob]

Roger D:

I have called the West Coast of British Columbia la la land for some time. It is as though we have been impervious and oblivious to the global economic downturn. I attribute that to some extend to all the construction related to the Winter Olympics and that event itself. That is now behind us and I think stark reality is around the corner.

When I listed my property for sale there was an article in the local newspaper. I forget who compiled the data but from a property value to income quotient perspective, Vancouver was the least affordable city to live in in all of North America. It was also more expensive than the United Kingdom, New Zealand and Australia and I know Australia has been in a housing bubble. I suspect the next shoe to drop will be in some of the large cities in Australia. I don't know about New Zealand.

Locally housing prices dropped by 15 to 20% on average during the stock market crash. They have regained that and then some. It is apparent to me that prices will decline again by that order of magnitude or more.
I sold and bought back before in the late 1990s and I will buy again down the road.

[Mamma Boom Boom]

Looks to me like a lot of individual stocks have got some chart repair to do, before we can actually make some headway.

[Hockthefarm]

Roger:

Here in the USA, price has been a very secondary consideration in home purchases. The primary consideration has been "How much can I pay" or how big a loan can I get. The banks/shadow banks here exploited that view to perfection imo in the boom into 2005. They also figured out how to move the paper out the other end just as successfully.

Everything worked perfectly because no one paid off any principle, and prices naturally rose.

Today housing is no longer an investment. Prices typically must rise 4 to 5 percent to break even. As Prechter has pointed out adnausium, people are now paying big time for the thrill of living in a home. The fence swingers are FUBAR. It is a tough spot for gubmint, because rising RE allows for massive growth in government. Nobody cares because on paper they feel rich.

It is why the Prechter view is so compelling.

Hock

[Hockthefarm]

whitebear:

"how come those Chinese are bringing bag of money to buy up the high-end of the market in Vancouver then?"

I doubt it has much to do with RE. They have survived in a communist country for many years and know enough to keep a portion of their money out of the reach of their government. I saw a lot of that in the 1980's when I lived in Calgary.

Hock

[Steven_737]

it appears that this rebound leg since 15:25 EDT 07-06-2010 is complete,
having a structure a-b-c-x-1-2-3-4-5

cheers :)

[Stone Bold Steve Baustin]

Imploding? Not in Vancouver. See recent Yelnick post for more info.

Roger D you are an alarmist, which is fine, but your track record sucks, which is not fine. Suggest you cool your jets for a while and come back if prices fall a bit. That way you'll have more credibility and respect.

Upstart, those magic number turn dates almost never work out. I know 144 = 12 x 12 and is a fibonacci number and it would be really, really super cool and all but I doubt there's a profitable trade there.

[Steven_737]

watching triangle formation on 5 min ES

momentum shift under way; upside momentum not giving up easily!

market not ready yet to retrace to ES 1027.5~1030.5 (50%~38% zone)

[Steven_737]

possible distribution just above support at ema(20) on 5 min chart

top of w4 ??

Lunch time

by 13:15 we will have more technical evidence...

[Trader 123]

Is anyone here actually LONG today?

[Roger D.]

"Roger D you are an alarmist"

Thanks, I been called a lot worse.

[Mamma Boom Boom]

Posted by: Trader 123 | Wednesday, July 07, 2010 at 10:16 AM<

I'm guessing you have a reading disorder...

[Trader 123]

My guess is that you are TOO AFRAID to pull the trigger given your earlier comments.

Typical internet blog filled with people that are far too PARALYZED by ANALysis.

Lots of predictions.
No real substance.

[Les]

Looking for 1071 gap to be filled. Have been since we 1011 measured target.

[Les]

Watch also 1050 resistance for top of potential bear flag. Bottom would be at 1030 tomorrow.

[Bainbridge Bailister]

"Roger D you are an alarmist"

Thanks, I been called a lot worse.

Heck, alarmist can be a compliment if things are going to hell! It's just that the markets have not been crashing. But they might. So keep some prediction powder dry and use it only when you're feeling really sure. Because lately you've been wrong.

[Steven_737]

Price has reached an important Fibonacci retracement level (50% of wave 3) at ES 1043 and a fibonacci projection at ES 1043.5

R2 is at 1050; R2 is an intraday target that may be the end of w4.

Worth noting that the 61.8% retracement of 3 is at ES 1051.3

cheers :)

[Steven_737]

"Typical internet blog filled with people that are far too PARALYZED by ANALysis.

Lots of predictions.
No real substance."

It just happens that those who trade Elliott Waves AVOID to trade wave 4.

Since you do have the substance as you claim, go ahead and enlighten us
regarding the trading method you use and
the setup you traded today.

I guess you will use the usual answer to dodge the question:

"Too busy managing trades",
"too busy scalping",
"Elliott wave sucks"

what's a "REAL TRADER" like you doing here?
WHY are you not subscribing/posting/chatting to the REAL STUFF trading rooms?

how come you are not posting your stuff at
the "REAL TRADERS' " trading rooms that day-trade stocks
OR
how come you are not chatting with "REAL TRADERS" at
the "REAL TRADERS" trading rooms that go for 1 ES point, maybe 2 when the wind is right?

I guess the "REAL TRADERS" trading rooms are not so good after all.

:)

[Cory]

Wrong. The Real Traders' trading rooms are very good.

I think YOU are a poor excuse for an analyst/trader but I wish you well. Have you made money today? Why or why not?

STICK TO THE FUNDAMENTALS. And use technical stops!!!

I maintain, we are in a trading range. There will be sharp drops but then they will be what I call "counterbalanced." See Soros' reflexitiy.

[usdollar]

I dont day trade, I am still short with my Aug puts. We should see a top today, or early tomorrow, and then continue down another 1300+ points.

[Trader 123]

"It just happens that those who trade Elliott Waves AVOID to trade wave 4." - Steven

Really now . . .

And just how confident are you that we are in a Wave 4 right here???

[Harry]

Another miss for Prechter. Another sad day for the suckers who saw the NYT article and signed up.

[da bear]

E wave's comin' hide your Hochberg!

da bear

[Michael]

"Another miss for Prechter. Another sad day for the suckers who saw the NYT article and signed up." - Harry

Agreed 100%

A slow "grind" higher is not reflective of a typical Bear market rally that fizzles quickly. There were positive MACD divergences showing up the last few days too. NYSE A/D line is also constructive today.

Yet another "swing and a miss" by Uncle Bob!

[Mamma Boom Boom]

Personally, I didn't like today's action. I would like to have seen the gap filled, this morning, and the thing left holes all the way up. But, we'll see what happens tomorrow.

[Michael]

The 1071 SPX gap lies overhead. We will most likely trade straight up into it tomorrow. Point and Figure "box" chart targets 1110 SPX for this move.

Meanwhile, today saw multiple $3-$4 moves in MOS, CLF, WLT, FCX, and RIG.

[Harry]

How does Precter get press, let alone good press? Seriously. He's like a svengali. I doubt anyone else with his track record could make a living selling advice.

[Roger D.]

JNK

http://www.screencast.com/users/parisgnome/folders/Default/media/9aeca677-06dc-4bba-b377-9ff3b9ab1e71

Roger D.

[BZX]

Expanding triangle bullish Elliott count...
http://www.youtube.com/user/tradeyourwayout

[Steven_737]

"Really now . . .

And just how confident are you that we are in a Wave 4 right here???"

If this is not a wave 4, I can take the continuation trades of the bullish trend, when they set up.

Granted, I was looking for the exhaustion of wave 4; therefore I did not trade. There is no harm in that. There will be another trade tomorrow.

Whoever traded long today, made money. That's nice.

In any event, if you don't like Elliott Wave
and you keep posting here, one of the obvious reasons is that you want to be asked about your method.

So the question is still the same:
what is the trading method you use and
what is the setup you traded today.

[Michael]

"Personally, I didn't like today's action." - Mamma

Actually, slow "grinds" up are the BEST of all rally modes in my book.

They are not the typical sharp, short, bear-market kind of counter-trend rallies that are reflective of a downtrend. Time will tell, but today's SLOW grind up with strong A/D numbers is very constructive. A simple 50% retracement gets you to the "gap" at 1071 SPX.

Prechter having appeared in this past weekend's NY Times and again today in a Forbes article simply adds more fuel to the fire.

[test]

Wheat is in MELT UP mode!

http://finviz.com/futures_charts.ashx?t=ZW

[Xuzi]

Hedge fund maven Doug Kass reports stocks have hit a bottom for the year so set your phasers to "buy buy buy".

Video: Doug Kass "Low for the year is in"
http://www.ibtimes.com/articles/33309/20100707/video-doug-kass-stocks-have-hit-bottom-for-the-year.htm

[Steven_737]

"I think YOU are a poor excuse for an analyst/trader"

We are not having a contest here; we are just posting opinions about the wave count.

I have never claimed any rating.
As a matter of fact, I often post to ask Duncan his opinion on my wave count.

Why are you so annoyed? I don't recall criticizing your posts.
As a matter of fact, I have criticized only one post in 2010.

"but I wish you well."

so do I.

[Michael]

Steven,

Since the channel down off the 1131.23 high of June 21st has been busted given today's strength, I would suggest that there is a higher degree wave in play here... possibly meaning that Minuette (iv) is most likely Minute (ii).

Since I am a scalper/position trader I don't have a lot of time to contemplate all of the different interpretations of EWave. That having been said, I am cognizant of some of the 'counts' out there.

You might want to take a look at the US Dollar count. It would appear that were are currently in some sort of an A-B-C Wave (2) correction off the recent 5-wave advance up into the early June highs.

If that is the case, then the Euro has more to rally as the Dollar heads back down to previous 4th wave support around 81.50 on the USD. To me, that means that oil and other commodities rally . . . which should also cause the S&P to rally.

[usdollar]

http://4.bp.blogspot.com/_wpKB2FCKFlc/TDO_Tm-sXoI/AAAAAAAAC3A/vswBhjiB2Yk/s1600/20100706b.png

This graph with a wave 2, which probably is over tomorrow morning, covering the gap @ 1075 before turning lower. So we will most likely see the blunt force of 3 of 3 of C1 Monday July 12.

[usdollar]

Red wave [2], looks like a fractal of green wave [2].

[Steven_737]

Thank you Michael;

I will look into that.

cheers :)