Is Canada’s housing bubble bound to burst?




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Is Canada’s housing bubble bound to burst?

  1. You forgot another choice. Tick housing prices will continue to rise.

  2. i think it will go up still, nothing ever goes down as much as it goes up…. and there’s more money now in people’s pockets, our economy is in great shape, Alberta needs another 100,000.00 skilled workers, meaning lots of $$$$$ will be made and spend here…. I say, bring it on!!!!!

    • Controlling for the rising quality of houses and inflation, the average increase in the price of housing approximates zero (and houses require upkeep, taxes, etc.). Yes there is demand for skilled workers in a few places (Alberta and possibly Saskatchewan), but that isn’t where prices are surging the fastest. Are there tonnes of jobs for skilled workers in Vancouver and the Toronto Lakeshore? Also, if it is about improving job prospects, how have housing prices managed to outpace incomes?

      Do yourself a favour. Go on yahoo real estate, and look at what you could buy for the price of your home in any major Canadian city if you lived in the US (a country that is richer than Canada, per capita, with better weather and lower taxes). It’s a bubble, the only question is when it will pop.

      • I understood that Vancouver had an issue with Chinese buying up the realestate. I also understood that Toronto has rich Americans moving north for a better tax advantage. While it might be true that I could get a way better house in a US city for a lot cheaper than I could buy a new one in Calgary, chances are I would be among the unemployed in that US city. If you have visited any of those cities you would see the unbelievable number of homes for sale. It is going to take quite awhile for their economy to turn around.

  3. Prices will level off with relative prices of detached houses, condos and rental units adjusting for: a) later family formation, b) downsizing by boomers, and c) policy by the Bank of Canada and CHMC. A crash landing can be avoided. However, the BOC has to worry about the impact that rises in the interest rate to control inflation will have on the value of the Loonie, our export performance in sectors other than oil, as well as the demand for houses.

  4. Shh! Don’t Jinx it!

    (I see you Feschuk)

  5. Canada will see a housing crash much like the US. In fact Canada is now in worse shape. What delusional Candaians.

  6. If the HELOCs – dangerous from the getgo and virtual ATMs in effect – don’t get ya, a potential housing bubble will. ‘The average house price in Canada is now nearly five times average income – well above the historical norm,” and the Bank of Canada expects debt levels to reach near 160% of disposable income – the same level reached by U.S. just prior to the crash See Barrie McKenna’s piece in today’s Globe: http://goo.gl/z9Iam

    Vancouver and Toronto are the hotspots, but prices there affect the national average and overall economy. All our eggs – soon to become rotten – are in resources and housing baskets. And the delusional still think that the Harper Regime are good economic managers and that banksters, despite their $114 billion sleight-of-hand shift off their balance sheets to CMHC facilitated by Flaherty and Co. – which is if not technically is in effect a bailout – are just ducky.

    Banksters, aided and abetted by Flaherty and Carney with their classic neoliberal agenda and monetary policy, have been keeping us comfortably in debt for quite some time now, primarily through our houses. That process conflicts, as McKenna says, with their “so-called dire warnings” about debt – debt which they have implicitly encouraged by policy on behalf of the financial sector.

    • “The Average house price in Canada is now nearly five times average income – well above the historic norm”.
      I read that and I doubted the validity of it so I did some research. In 1951, the average house sold for 16,000….around 5X as much as the average salary, which was $3,500.
      What is missing here in your assessment is the responsibility that must be assumed by consumers for their vapid consumption of very expensive toys…big tvs, expensive cars, holidays, boats, RV’s, etc. etc. ….and all of it on credit. Surely, you are not blaming bankers for our desire to indulge in things we cannot afford but want and want NOW. Household debt isn’t just realestate, it is massive credit card debt. Now we can blame banks for lending us money but really the buck stops with us. We buy too big of houses because we want them, we buy toys because we want them and we use credit like we’ll never have to pay it back.
      As for your assertions that Vancouver and Toronto affect the national average and overall economy, I would have to ask you to show me how that has happened. Take a look at Calgary, we have a booming economy and yet still, we are not seeing anything like what is happening in Toronto or Vancouver. In fact, despite record sales this April, prices actually declined a bit.

  7. Dumb question. There is no “Canadian housing bubble” because there is no Canadian market. There may be some markets in Canada that are currently too high, but Canada is too large to have one market. Vancouver and Toronto are not similar to rural Saskatchewan — the markets are completely different.

    • Over the last 10 years, inflation adjusted housing prices have been going up right across the whole country with just a few exceptions, so yes there is Canadian housing bubble. The bubble was caused by non-local factors such as low Canadian interest rates and easy access to huge mortgages. Therefore, housing prices will crash right across the country with a few exceptions.

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