“…a long list of organizations that have weighed in on the matter of the Canadian residential housing market.”

“DBRS, the Canadian headquartered credit rating agency, has joined a long list of organizations that have weighed in on the matter of the Canadian residential housing market.
Like many of those previous studies and against the background of concerns being raised by the federal government and the Bank of Canada, DBRS found some positive — and negative — aspects about the sector that seems to consume Canadians. And with good reason: in many cases, the family home is the largest source of household wealth.
For instance, despite record high levels of household debt, DBRS argued that Canadian households have net worth that could withstand a property value decline of 40%.
But “rising household financial leverage and reduced affordability are of concern, rendering Canadian households stretched thin and vulnerable to liquidity shock or cash flow shortage, such as loss of income or unexpected expenses,” wrote DBRS.”


“DBRS said that “a combination of higher interest rates, lower property values and a drastic increase in unemployment would be of great concern as mortgage defaults are closely related to employment and individual family situations.”

– from Rising mortgage debt rendering ‘Canadian households stretched thin’: DBRS, Financial Post via The Province, 24 May 2012

2 responses to ““…a long list of organizations that have weighed in on the matter of the Canadian residential housing market.”

  1. Toronto average condo prices did indeed drop by about 40% over a period of about 4-5 years in the early 1990s. This happened after a speculation-fuelled RE boom. Sound familiar?

  2. “Canadian households have net worth that could withstand a property value decline of 40%.”

    If withstand means “not dying”, then ya i guess 99% can withstand it.

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