Canada's Housing Bubble

Analysis of the real estate bubble in Canada --

Offshore bids price Canadians out of housing market Print E-mail

Mar 16 2012 Prithi Yelaja CBC News

Toronto bungalow sells for $421,800 over asking price in market's 'new reality'

Overseas investors are snapping up properties in Canada's largest cities, driving up prices and pushing ordinary Canadians out of the housing market, observers say.

Real estate experts call it the "new reality," and the high price paid for a north Toronto bungalow is the latest evidence.

This month, the three-bedroom bungalow, circa the 1960s and without much updating, sold for $421,800 over the asking price, creating a buzz among agents and other buyers.

Affordable housing elusive for new Canadians in Vancouver, Toronto and Montreal Print E-mail

Mar 15 2012

With housing prices at record levels, a University of British Columbia-led study finds that new Canadians are struggling to find adequate and affordable housing in the country’s three largest cities.

The study of 600 immigrants and refugees using settlement services in Vancouver, Toronto and Montreal finds that half of those surveyed reported living in crowded dwellings with hazards such as dampness and mould, broken plumbing, insect infestation and inadequate heat.

Canada’s housing market flirts with bubble Print E-mail

Mar 15 2012 Warangkana Chomchuen

NEW YORK (MarketWatch) — Rising home prices over the past decade, combined with mounting household debts, have fed concerns that Canada’s housing market has formed a bubble that’s about to burst.

“We call it a tug of war,” said Sonya Gulati, economist in regional economies, housing and government finance at TD Economics, an affiliate of Toronto-Dominion Bank. “Low interest rates make people want to participate in the housing market, but with modest growth, not strong job creation, we can see a negative repercussion on the horizon.”

My Open letter to Mr Flaherty Print E-mail

Mar 14 2012

The Honorable Jim Flaherty

Minister of Finance

Don’t get caught in housing debt Print E-mail

Mar 13, 2012 Jerry Agar Toronto Sun

I would hate to have happen to you what happened to me, so let me tell you what it was like to own a home in the United States when the market crashed.

Two things occurred in the past two weeks that have me spooked on the housing market.

Steve Keen on the Australian economy and housing bubbles in Australia, Canada, UK and Hong Kong Print E-mail

Dim lights

Mixed message on debt Print E-mail

Mar 11, 2012

Why is the federal government warning Canadians about debt while it is encouraging aggressive mortgage lending?

When it comes to interest rates and housing prices, it's difficult to see the thread of consistency in federal government policy. Bank of Canada governor Mark Carney and Finance Minister Jim Flaherty frequently warn Canadians that levels of household debt are too high. At the same time, the Bank of Canada's low interest rates make possible the low mortgage rates that are fuelling the housing market.

Canada's dirty little sub prime loan secret threatens to sink housing market Print E-mail

Mar 11, 2012 Tim Pelzer

VANCOUVER - While the U.S. is still suffering from the sub prime debacle, Canada's housing market is an island of tranquility.  House prices continue to rise, people are buying houses and apartments and paying their mortgages.  The banks are on a solid footing, making profits and not facing bankruptcy or asking for bailouts.

Canadian Real Estate Bubble Finally Popping? Print E-mail

Mar 11, 2012 Hardcore Value

Ok, so far I’ve been wrong on my view of the Canadian residential real estate market.  My first article, the Canadian Real Estate Bubble? was back in March 2011. I also wrote back in October 2011 that the CMHC was a key player in inflating the bubble and likely to come under stress when prices fell. However, its March 2012 and prices (and debt) continue to rise.

Vancouver's Demographic Time Bomb Print E-mail

Mar 09, 2012 Patrick M. Condon

During a lecture last fall, I asked my 200 undergraduate students to raise their hands if they believed they would someday own a home. Only about one in 10 thought they would.

My reaction at that moment was shame. I am one of the lucky ones. Born in the great baby boom glut of the '50s and '60s, I and most of my peers own a home.

But I fear this will not be the case for my students. Confronted with salaries that have stagnated for almost 20 years, they are faced with a housing market where the real cost of owning a home has increased by 300 per cent during the same time span.

Canada ranks in middle on global real estate froth scale Print E-mail

Mar 07, 2012 Michael Babad

Where Canada stands

Canada ranks "in the middle of the pack" on the global real estate froth scale, Bank of Nova Scotia says in a new look at housing markets around the world.

"The global housing boom which began in the mid- to late-1990s and extended through the mid- to late-2000s was notable in its breadth, strength and longevity," economist Adrienne Warren says, and has taken different paths across different markets.

Canadian bubble trouble Print E-mail

Mar 06, 2012 Leith van Onselen

In the years following the global financial crisis (GFC), the Canadian and Australian housing markets were among the best performing in the English-speaking world. While housing markets in other English-speaking nations- most notably the United States, Ireland, the United Kingdom, and New Zealand – remained in a funk, Canada’s and Australia’s powered on to new all-time highs.

Housing bubble: listening for the pop Print E-mail

Mar 05, 2012 Colby Cosh

Here’s a blog post that is going to be worth exactly what you paid for it. I promise. Like the rest of you I’ve been reading a lot of “pro” and “con” material about the possibility of a Canadian housing bubble. Including the dramatic material from our latest issue. And I have a couple of problems many of you will have shared in trying to follow the debate. One, my own involvement in the housing market (and we’re all involved, on one side or the other) makes it difficult for me to set aside wishful thinking. Two: the data are awfully slippery. A lot of what we hear is anecdotal; a lot more of what we hear, even from informed sources, seems little better than anecdotal; and where there is solid information about things like debt-to-income ratios and movements in good indices of housing prices, it’s hard to interpret.

Why we’re in trouble if housing craters Print E-mail

Tim Shufelt Feb 23, 2012

Household debt accumulation

The Canadian household debt burden has climbed ever upward over the last 30 years. That trend generally held globally, amplifying in the years preceding the financial crisis.

Unlike in the United States and the United Kingdom, Canada refrained from the worst of those “excesses,” and thus averted a good amount of the economic carnage that ensued, the report said.

Plan for an economic 9/11 Print E-mail

Feb 29, 2012 Mark Duell

'Plan for an economic 9/11': Analysts warn Americans to buy guns and gold, predicting market crash and street riots within a year

  • Gerald Celente, Harry Dent and Robert Prechter all predicting big trouble
  • Markets and unemployment figures posting best showings in four years
  • But analysts say Americans will riot when another Great Depression hits

Just when you thought unemployment was dropping and stock markets were surging back, these three analysts today sent out a stark warning to Americans to brace for another financial crash.

Trend forecaster Gerald Celente advises buying a gun to protect your family, stocking up on gold if the dollar crashes and planning a getaway, so it’s no shock he’s preparing for an ‘economic 9/11’.

Vancouver Housing Bubble: Part 2 Print E-mail

Feb 29, 2012 Saj Karsan  Market Overview

Two weeks ago, we looked at the possibility of a Canadian housing bubble, and saw that Vancouver looked particularly bubble-icious in terms of new inventory. This is often a good indicator, as builders in a free, capitalist society should only overbuild if they are getting a strong price signal to do so. But of course, it is possible that builders are just irrationally overbuilding for some reason (e.g. government stimulus, tax credits, expectations of price increases etc.), so it does make sense to look at more metrics than just new home inventory before concluding that there is a price bubble.

Time to panic: Canada looks just like the U.S. did before the housing crash Print E-mail

Feb 28, 2012

Why is everyone ignoring this unfolding disaster, which Ottawa, the Bank of Canada and lenders have helped inflate?

Back in the heady days of 2005, America looked like an awfully nice place to buy a house. Home prices were marching ever upwards. Home ownership was at record levels. Mortgage rates were at historic lows. Unemployment was falling while the economy was growing at a healthy clip.

Home sales had started showing their first signs of slowing that year, but that didn’t sway the National Association of Realtors from its persistently sunny view of the country’s housing market. “We’re confident that housing is landing softly,” David Lereah, the association’s chief economist, wrote in a November 2005 report just before house prices started a descent that would eventually wipe out nearly $30 trillion in global wealth.

Housing bubble or prudent investment? Print E-mail

Feb 27, 2012 Jay Bryan Postmedia News

Some analysts argue that the housing market is way overpriced. But, a study by the National Bank suggests otherwise and that a crash is awfully unlikely, Jay Bryan reports

One of the dirty little secrets of financial analysis is that you can "prove" that the very same asset is either expensive or cheap, simply by choosing different yardsticks to measure it.

In the debate over Canada's supposed housing bubble, you can make housing look expensive by looking at how home prices compare with annual incomes or with rents. In both cases, these ratios are now above their long-term averages, suggesting housing is expensive.

Bank of Canada issues fresh warning on debt Print E-mail

The Bank of Canada is warning again that growth in household debt supported by a decade-long increase in home prices means families and the economy as a whole are vulnerable to a correction in the housing market.

“Rising house prices can facilitate the accumulation of debt,” the central bank said Thursday in a collection of its recent research on the subject. “Households could therefore experience a significant shock if house prices were to reverse.”

Canada's housing bubble: This time is not different Print E-mail

Feb 23, 2012 George Athanassakos

The resilience of the Canadian housing market continues to confound experts. Last April, I wrote about the hot housing sector in Canada. Since then this sector has become even hotter, exhibiting strong signs of a classic bubble. More than ever before, I believe that Canada’s housing market is due for a severe correction.

Bubbles are hard to see in advance and even harder to know when they will burst. No matter how high prices go, there are always analysts who try to justify them by arguing that “this time things are different”. This was the case during the dot com bubble in late 1990s and this is what has been happening nowadays with the housing bubble in Canada.


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