The Canmore housing market went within one month from a crazy binge to a screeching slowdown. For people who put the houses recently on the market, the big question is "Is it just a demonstration of relief of hundreds of thousands of Canadians taking finally holidays, being able to travel and breathe without a mask? Or is it a breather, and pause of the market before another busy autumn? Or is it a beginning of the correction after a very long appreciation?".
According to Better Dwelling Canada is in the longest expansion from any G7 nation. I disagree with their harsh title for the article"The Canadian Property Bubble Has Grown For 24 Years, Longer Than Any Other G7", see the graph:
Length Of Home Price Expansion Across The G7
The length of time home prices in G7 countries have expanded with a correction (10% or more). Measured at the trough of the previous housing cycle correction or crash.
"Canada’s expansion isn’t just unusual for Canada, it’s unusual for any advanced economy. The next closest country is Germany, where it is currently 12.5 years without a correction. Despite Germany having half the expansion, Canadian home prices have grown 3x faster. Compounding inefficiencies. The magic of math, eh?"
Better Dwelling did not notice that Canada is big ;-) and that general statistics which heavily depends on heavily populated provinces is heavily distorted. Calgary went through more than one 10% dip during the last 10 years so the graph and title are a little bit bombastic. And Canmore stagnated and dipped in this period too. Alberta might as well profit dramatically when the border finally opens for international travel and we will happily admit our huge (by developed countries standards) number of immigrants. And they usually go to where the housing is cheaper. And Alberta is just recovering from the oil price crisis and I hope that our federal government will not try to put Calgary under water again.
While I would not be surprised if there is a slowdown (in the number of sales), I would be surprised if the prices this year drop instead of leveling off. WHY? Because the inflation, namely in building materials: Lumber prices pushed the cost of building a home higher — a lot higher. Canadian Home Builders’ Association (CHBA) data shows members saw lumber costs soar. In fact, more than half of builders said lumber costs increased at least $30,000 per dwelling in Q2 2021. Even though lumber prices have since crashed, don’t expect cheaper housing. Not in the near term, anyway.
There are not many towns like Canmore. As far as alpine skiing, there are only two world-class ski areas in Canada, the Whistler area and Alberta Rockies with multiple ski resorts. Compared to other comparables, Canmore is still behind as far as prices. Some locals are desperately trying to believe that they are still living in a cute little old town and did not embrace the fact that they are living in one of the best ski resort towns in the world. I am stressing the winter destination because there are many great BC and Ontario summer destinations to compete with. It is my humble opinion that even if Canada is heading into a correction, the correction will be very asymmetrical, with Canmore getting a few scratches but coming out even stronger when the dust settles. IF there is any dust coming our way. So far it looks it is mostly just a cloud of smoke.
BUT, there is always BUT. I also believe that there will eventually be a reconning as far as printing the money and controling the bond market. What you should realize is that we are now NOT IN MARKET ECONOMY. Governments are controling the "market", and they can only dream about controling it for ever. And that is why, even with corrections, the real assets will win.
I suggest you read Mark J. Grant chief strategist about what is going on at the government level in the USA. https://seekingalpha.com/article/4447064-taming-of-the-shrewd
Obviously with those who will have some dry powder to benefit from corrections or even crashes. Those who will have enough money to survive raise in interest rates will be happy in a long run.
Those who will have extra dry powder to buy at that time, will be the ultimate winners. As always. Enjoy the ride!