Canada's Housing Bubble

Analysis of the real estate bubble in Canada --

Neville Bennett is worried a major housing bubble in Canada may cause international distress Print E-mail

Apr 21, 2012 Neville Bennett

Canada has been held up as a “miracle” economy that escaped the worst of the GFC.

But any Kiwi looking at its present performance will be reminded of NZ a few years ago when we had a mirage of booming housing and consumption.

Carney: Be wary of debt Print E-mail

Apr 19, 2012 MARK DUNN

OTTAWA -- Mark Carney offered some advice to Canadians on Wednesday -- be careful about borrowing because the days of bargain-basement interest rates are coming to an end.

"If you are borrowing, make sure that you can sustain that borrowing in a world of higher interest rates," the Bank of Canada governor said at a news conference, where he said the bank's benchmark overnight rate would remain at 1% for the time being.

Real estate: more of a burb than a bubble Print E-mail

April 18, 2012 Will Van’t Veld Troy Media

EDMONTON, AB – Bubbles tend to be defined as situations in which an asset’s price has been bid up well beyond what current, or even future, fundamentals would dictate – which tend to centre on interest rates, the labour market and demographics.

It might, therefore, seem relatively straightforward to identify and deflate bubbles before they occur, but the reality of the situation is far different.

Mortgage market tiptoes toward subprime Print E-mail

Tighter CMHC rules are pushing more and more people into subprime borrowing to finance their real estate plans.

As the big banks get choosier about who they'll lend money to in this hot housing market, people with questionable credit are benefiting from Canada's once-small but now booming subprime mortgage industry.

Be very afraid of the Canadian housing bubble Print E-mail

April 17, 2012 Don Pittis

I want you to be afraid. Very afraid of the Canadian housing market.

I want people who are considering buying a house in Canada to be the most frightened. People who just bought a house also have every right to be nervous. But even if you don't have a stake in the property market, I would like you, too, to be fearful of a bubble in Canadian property.

What will make the housing boom go bust? ‘Greed’ Print E-mail

Speculation in Canadian cities such as Vancouver and Toronto is wildly out of control, and the real-estate bubble in this country is overdue for a correction painfully similar to the one south of the border in 2008. As well, Canadian investors who are buying in the depressed U.S. market today are taking much bigger risks than they think.

Bank urges rate hikes to slow housing market Print E-mail

Japanese bank Nomura suggests 0.5 per cent increase

A major international bank said today that Canada's best hope to avoid a real estate crash would be for policymakers to raise interest rates by half a per cent over the medium term.

"We believe that the best way to engineer a soft landing in the housing sector would be for the Bank of Canada to increase its policy rates slightly," says the report, from international financial conglomerate Nomura's contributing economist, Charles St-Arnaud.

Canadians continued to heap on debt in first quarter Print E-mail

April 12, 2012 Staff

Canadians continued to pile on debt despite dire warnings from financial experts and the central bank about cheap borrowing costs, a new study says.

Non-mortgage debt was up 3.4 per cent year-over-year in the first quarter and new loans rose by about one per cent, Equifax Canada's quarterly consumer credit study showed.

Toronto, spectator to a neighbour’s real estate meltdown Print E-mail

Sherry Cooper was reminded of just how devastating the U.S. housing crisis has been for families and the overall economy in that country after speaking recently with a friend who is having trouble selling his house in New Jersey.

Ms. Cooper, the chief economist at Bank of Montreal, is starting to worry about Canada’s housing market after refuting the arguments of the extreme bears in the past.

Harbingers of doom Print E-mail

April 10, 2012 Andrew Coyne

Even by Maclean’s standards, the cover was alarming. “You’re about to get burned,” screamed the headline, over a picture of a house that was literally on fire. “Canada looks like the us before its devastating housing crash — maybe even worse.” And the kicker, for those still hesitating: “Why it’s officially time to panic.”

This last was doubtless something of a little in-joke. For my old colleagues at Canada’s newsweekly, it is always time to panic, especially about house prices. The magazine’s editors inhabit a world beset by all manner of hitherto undetected demons, from more expensive groceries (“sudden shortages, riots over prices, the world food crisis is about to hit home”) to insomnia (“the truth about a modern epidemic”) to, well, “The Return of Hitler.”

Carney ready to step in if household debt levels get out of hand Print E-mail

OTTAWA - Mark Carney has a dilemma: He views record high household debt the number one domestic risk to the economy, but believes he would hurt the recovery if he raised interest rates to slow borrowing.

But the Bank of Canada governor said in an interview with The Canadian Press that he would be prepared to intervene if things got out of hand.

Mark Carney and Some Myths On Inflation Print E-mail

April 07, 2012 James E. Miller

Central bankers are a fickle breed.  On one hand, they are more than happy to take credit for a booming economy and a robust housing market.  On the other, they point the finger of blame at anyone and everyone when a fiat engineered boom reaches its unavoidable end.  If taking responsibility for your actions is the measuring stick for responsibility, consider central bankers to be children among men.

Canadian Housing Market Reminiscent of U.S. Housing Market of 2006 Print E-mail

April 05, 2012 Michael Lombardi

A familiar bubble north of the border…

Canada’s economy has been hailed as one of the better performing economies in the world since the financial crisis hit in 2007. Canada’s job market has stayed relatively stable, which is why the housing market has been so strong.

Canadian home prices have increased steadily since the financial crisis hit, which I’m sure will come as a big shock to the average American.

Another Housing Market Bubble About to Burst, Warns Leading Financial Web Site Profit Confidential Print E-mail

April 03, 2012 New York, NY (PRWEB)

Canadian home prices have increased steadily since the financial crisis hit and Michael Lombardi, lead contributor to popular financial newsletter Profit Confidential, believes that Canada is potentially setting up for a very nasty fall in home prices.

In his recent article, Canadian Housing Market Reminiscent of U.S. Housing Market of 2006, Lombardi outlines the basics of this thesis.

Why the federal budget said nothing about mortgages Print E-mail

April 04, 2012 Erica Alini

When it comes to the housing market, Jim Flaherty has made it clear that he would rather leave it all up to the proverbial invisible hand. A week before he introduced the federal budget last Thursday he poignantly told reporters he’d “quite frankly” like the market to “correct itself.”

Only Canada's house-price ratio tops NZ Print E-mail

April 03, 2012 Anne Gibson

Canadian house prices are 54 per cent overvalued compared with rents and income.

New Zealand house prices are the world's second-highest compared with rents, according to the Economist.

The magazine published a list of 21 countries, comparing prices with rents, and showed that only Canada topped New Zealand.

It showed the relationship between the price of buying a house and the amount of rent which would be generated from that house, saying the price-to-rent ratio was "an analogue of the price-to-earnings ratio used to judge the equity value of listed firms".

Credit tightening and the end of the Canadian housing bubble Print E-mail

April 02, 2012 Ben Rabidoux

I’ve often said that the next decade for real estate in Canada will be fundamentally different than the last.  I’ve suggested that a demographic imbalance, dislocation between prices and underlying fundamentals, and rising instead of falling interest rates are all reasons for this.  However, the greatest difference will be in the availability of credit going forward, and those who try to explain real estate prices in Canada without acknowledging the role of easy, accessible credit over the past decade have completely missed the boat.

We’ve seen a decade of loosening underwriting standards in Canada.  The signs are many that this is now changing:  The incremental tightening of mortgage credit that we’ve recently seen, with lenders scaling back on business for self (stated income) and equity lending was the first sign that things were changing.

Canada's bubble will not burst says JLL boss Print E-mail

April 02, 2012

Fears that the Canadian property market may be about to crash are unfounded, a leading property agency told OPP this week.

According to Jeff Mayes, the Vice President of Jones Lang LaSalle Canada, there is no prospect of a bubble hitting the Toronto or Montreal markets.

Canadian home prices rise in January, Vancouver’s continue to fall Print E-mail

March 30, 2012 Reuters

TORONTO - Canadian home resale prices edged up in January from December after two months of declines as the big Toronto market showed strength but Vancouver continued to falter, the Teranet-National Bank Composite House Price Index showed on Wednesday.

Rich Asians Buying B.C. Real Estate By Helicopter Print E-mail

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