“The resilience of the Canadian housing market continues to confound experts. … 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.”
- from ‘Canada’s housing bubble: This time is not different’, George Athanassakos, Globe and Mail, 23 Feb 2012
“A fall in house prices decreases the value of collateral held by households, leading to a deterioration in the state of household balance sheets,” the central bank said, noting that many families “could therefore experience a significant shock if house prices were to reverse.” …
Finance Minister Jim Flaherty, meanwhile, said on Thursday in Toronto that authorities are keeping an eye on the hot condominium market in some cities, and urged borrowers to resist buying “the most expensive house they can possibly buy.”
- from ‘Central bank targets home-equity credit lines’, Globe and Mail, 23 Feb 2012
“An indebted household, particularly one that has borrowed against home equity, is one that is vulnerable to the forces of depreciation.
The behaviour of the Canadian housing market over the past several years alone has some convinced of an impending correction.”
- from ‘Why we’re in trouble if housing craters’, Financial Post, 23 Feb 2012
Show of hands.. Anybody who hasn’t heard that Housing in Canada is in a ‘Bubble’?
Okay… so we’ve all heard.
Pumps are primed.
Now class… How are we going to respond to initial price drops?
[hat-tip Makaya for three of the above links -ed.]