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Canadian Housing Bubble??


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For my friends and northern neighbor, Grant's Interest Rate Observer had an interesting article about Canadian housing prices. Specifically reporting on the US equivalent to Freddie and Fannie, Canadian Mortgage and Housing Corporation (CMHC).  The headline comparison was that at the peak of the US housing crisis, Fannie had a 1.5% equity to exposure.  Currently CMHC is near 1.2% to equity exposure. 


On the humor side for our BC residents, and maybe a comment on the housing market, try to determine if the photos depicted are either a mansion, or crack shack.







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  • 4 weeks later...

Another report was just released on Canadian house prices.




The report, entitled Canada’s Housing Bubble: An Accident Waiting to Happen, by the Canadian Centre for Policy Alternatives, looks at prices in Toronto, Vancouver, Calgary, Edmonton, Montreal and Ottawa.


It concludes that housing price appreciation is frothy in comparison to historic values.


“I think at best you will see stagnation in housing prices or some kind of correction, and at worst you will see the bubble bursting,” said David Macdonald, an economist and research associate at the centre.


Macdonald said this bubble is different than others, because for the first time it is spreading beyond Toronto and Vancouver.


“Canada is experiencing for the first time in 30 years a synchronized housing bubble across the six largest residential markets,” he said.


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I get the feeling from my social circle that the banks are too willing to refinance mortgages. People seem to be throwing $30K onto their mortgages for a new kitchen. I really wonder what will happen years down the line when people are ready to retire BUT have, for the most part, a large mortgage to pay off since they kept refinancing over the years to pay for "stuff".


In my household, it's been suggested that we refinance to pay for a new kitchen. So far, I have resisted. Sigh... I will continue my passive aggressive resistance.

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