Canada's Housing Bubble

Analysis of the real estate bubble in Canada --

Big banks warn on housing market Print E-mail

Jan 12, 2012

Toronto, Vancouver markets singled out

The robust Canadian housing sector, especially the booming condo markets in Vancouver and Toronto, could be at risk in 2012, say the heads of some of Canada's biggest banks.

Gordon Nixon, president and CEO at Royal Bank told a banking conference Tuesday the Canadian housing market could be headed for a slowdown, led by Vancouver and Toronto.

Greater Vancouver Residential Average Sale Prices Dec 2011 Print E-mail

Will housing decline be mild or 'something much nastier'? Print E-mail

Jan 09, 2012 Michael Babad Globe and Mail

Whither the real estate market?

Canada’s housing market is headed for a cooling-off period, which is no surprise, given the uncertain economic climate, a rising unemployment rate and recent changes to mortgage rules. The question is the path, and how steep that downturn will be.

By many accounts, the slowdown will not become a bust, with a moderate decline in prices over the next couple of years. Not all observers believe that, though.
Canada's Housing Market More Overvalued Than U.S. At Its Peak, The Economist Says Print E-mail

Jan 09, 2012 Daniel Tencer The Huffington Post Canada

Canada’s housing market is more overvalued than the US’s market was at its peak, and Canadians are carrying a larger debt burden than Americans were before the crash, a report from The Economist states.

Bear snarls at housing Print E-mail

Jan 5,  2010 Finn Poschmann Financial Post

It was a good run. And now, in 2012, it is time for Canada's housing market to stop running and catch its breath.

Three things have pushed me, growling and snarling, into the bearish camp. First is the seemingly relentless upward march in housing prices, which eventually will stop rising faster than incomes. Second is household debt, which has reached great peaks and will surely begin to wobble. Third is the heady share of domestic output that is being absorbed by housing construction, displacing arguably more productive investment elsewhere, which it cannot forever continue to do.

CMHC Releases 2011 Canadian Housing Observer Print E-mail

Marketwire Jan 03, 2012

a Comprehensive Report on the State of Housing in Canada

OTTAWA, ONTARIO--(Marketwire -12/29/11)- Housing-related spending accounts for more than 20 per cent of Canada's Gross Domestic Product, contributing about $330 billion to the Canadian economy in 2010 - up 7.1 per cent from $308 billion in 2009. This and other key findings are in the ninth annual Canadian Housing Observer, released today by Canada Mortgage and Housing Corporation (CMHC).

Real estate's down from the peak Print E-mail

Dec 29, 2011 Vito Pilieci The Ottawa Citizen

Ottawa's real estate market is showing signs of finally settling down.

In the new-home sector, builders scaled back in 2011, starting an estimated 5,750 homes (final numbers aren't in yet), compared to 6,446 units in 2010 and 5,814 in 2009, according to figures from Canada Mortgage and Housing Corp. (CMHC).

Merry Christmas and Happy New Year 2012 Print E-mail

Dim lights

TD: Real estate correction in store for Vancouver Print E-mail

Dec 24, 2011

Bank forecasts a sales drop of 15% and a home-price decrease of 12% in 2012

VANCOUVER (NEWS1130) - According to economists at the TD bank, "a larger-than-average price and sales correction looks to be in store" for the housing market in Vancouver. It forecasts a sales drop of 15% and a home-price decrease of 12% over the 2012-2013 period."

Phoenix Phenomenon: Why Real Estate Everywhere Will Eventually Drop Over 50% Print E-mail
Steven Jon Kaplan

During 2005-2006, we experienced a housing bubble in the United States which was accompanied by valuations in many regions trading at more than twice their normal historic levels. Today, we have similar housing bubbles in many countries with prices that are at twice or thrice their typical valuations relative to rents, incomes, and most other standard-of-living benchmarks.

Canadian housing market showing signs of a classic bubble: Merrill Lynch Print E-mail

Dec 20, 2011 Mario Toneguzzi Calgary Herald

CALGARY — A report by Bank of America Merrill Lynch says Canadian home prices are now showing many of the signs of a “classic bubble.”

“We estimate the housing market nationwide is about 10 per cent over valued,” says the report released on Monday by economists Ryan Bohren and Sheryl King. “Even so, the only way these valuations can be explained is by the record low mortgage rates. Under more normalized interest rates, home prices would actually look 25 per cent overvalued based on current prices.”

Mark Carney: The man who speaks the truth Print E-mail


In this age of spin, rare are the voices that speak with candour. Certainly, the federal government’s vast apparatus can’t be counted on to speak the truth, not with the Harper party’s partisan manipulation of every utterance. Nor can anyone count on the opposition parties, whose game it is to embarrass the government.

Record high household debt in Canada triggers alarm Print E-mail

Canadians have set a new record for household debt, a sign that many families are leaving themselves vulnerable to an economic shock.

The debt burden of Canadian households has surpassed levels of both the United States and the United Kingdom and, by at least one measure, they are hurtling toward those countries’ peak levels of 2007, new Statistics Canada data show.

Housing prices cool though sales still brisk Print E-mail

Dec 15, 2011 CBC News

Vancouver remains Canada's most expensive real estate market

Driven by hot markets in some unlikely places, housing prices are still rising in Canada, but not by nearly as much as earlier in the year, new data show.

The average price nationally for a resale home in November was $360,400, the Canadian Real Estate Association said Thursday, up 4.6 per cent from November 2010 but unchanged from October.

European crisis puts Canadians at elevated risk Print E-mail

Dec 12, 2011 JULIAN BELTRAME The Canadian Press

OTTAWA — The Bank of Canada is warning of a global epidemic of contagion spreading from Europe, saying Canada’s economy and financial systems are already being affected and risks of further damage are elevated.

The central bank’s semi-annual financial stability review released Thursday states bluntly that Canadians need to start worrying about the worsening debt mess in Europe and its ability to hit home hard.

Bank of Canada warns condo boom could be ending Print E-mail

The Bank of Canada has a warning for condo investors – the boom times may be over.

In its December economic review, the central bank said that "certain areas" of the housing market could see prices fall as the economy weakens.

"Certain areas of the national housing market may be more vulnerable to price declines, particularly the multiple-unit segment of the market, which is showing signs of disequilibrium," the bank warned. "The supply of completed but unoccupied condominiums is elevated, which suggests a heightened risk of a correction in this market."

Housing bubble set to burst: Report Print E-mail

Jul 07, 2011 Anne Gibson

New Zealand homes are overvalued by 25 per cent and the country is one of nine under threat of a housing bubble burst, says the Economist.

But the leading international publication's feature report - headlined House of Horrors - has been rubbished by real estate industry insiders.

The Economist ranked New Zealand in the world's top overpriced markets along with Australia, Belgium, Canada, France, Britain, the Netherlands, Spain and Sweden.

Canadian home prices stall in September Print E-mail

Dec 05, 2011 JOHN MORRISSY

It signals end of decade's outsized gains, which were unsustainable, economist says

The seemingly endless rise in Canadian housing prices finally took a breather in September.

After nine straight months of gains, resale home prices measured by the Teranet-National Bank Composite House Price Index were unchanged from the previous month.

Housing Bubble Print E-mail

Dec 04, 2010

A recent article in the magazine "The Economist" says home prices in Canada are overvalued by at least 25 per cent and that suggests possibilities of a housing bubble. David Madani is an economist.

Alarm bells sound over our house prices Print E-mail

Nov 30, 2011 Susan Pigg

It could well become the cocktail-party question of the holiday season: Is Canada’s gravity-defying housing market headed for a fall?

Britain’s venerable magazine The Economist says Canada is one of nine countries in the world where housing is overvalued by 25 per cent or more right now — and among four where prices are in line with those in the U.S. “at the peak of its bubble.”

The others are France, Australia and Belgium, it says under a headline that claims “the bursting of the global economic bubble is only halfway through.”


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