Gluskin-Sheff economist David Rosenberg concedes that the US recovery has been pretty staggering. But, he says, the US can’t hold a candle to his native Canada.
As for equities, U.S. investors are up 16.5% year-to-date on their S&P 500
exposure, but had they been in the Canadian market, they would be up 28% — this
is the ninth year of a secular outperformance of the Canadian stock market vis-à-
vis the U.S.A. during which Canada has outperformed by over 8,000 basis points.
The really good news is that, by our estimation, this secular period of Canadian
outperformance is only half done.
And then on the housing market
CANADIAN EXISTING HOME SALES — WHAT HOUSING COLLAPSE?
Overall, the Canadian housing market remains robust, however, with the rise in
prices, the best affordability level for homebuyers may be behind them and it
could be difficult to sustain the current pace of sales. On a seasonally adjusted
basis, sales were down 0.6% mum in August to 42,426 units as activity in
Alberta and Quebec declined, which more than offset the gains seen in the hot
British Columbia market. At the same time, the broad trend and dispersion of
the strength in the Canadian real estate arena is unmistakable — looking at the
25 metro areas, nearly three-quarters of the national market experienced year-
over-year gains in August, with the Vancouver area leading the way by a country
mile, up 117%, followed by Toronto (+27%), Calgary (+17%) and Montreal (+9%).
New homes listed on the MLS system have now fallen on a year-over-year four
months in a row, down 13.3% year-over-year in August to 212,227 units.
Indeed, inventories are in check with months’ supply now at 5 months, well
below the recession peak of 12.8 months back in January — this should help
provide support for prices going forward despite the recent erosion in
affordability ratios. Prices were down an average of 0.8% sequentially in August
but are still quite firm at +7.1% YoY (versus -6% south of the border).
By way of comparison, we just got news that home sales in Southern California
plunged 10.8% sequentially in August as the inventory of cheap foreclosed
properties dried up. Median home prices in the region are still deep in deflation
terrain by 17% YoY.