Canadian Housing Market on Shaky Ground
While the U.S. housing market underwent a stark correction beginning in 2006 and 2007, Canadian real estate prices have risen strongly over the past decade. The global financial crisis caused but a brief hiccup in an otherwise consistent trend of skyrocketing home prices, however, many economists and experts have been warning that an eventual market correction is imminent.
The Huffington Post reports that a recent study by economist Diana Petramala found “Canadian housing is massively overvalued — by 60 per cent compared to rental rates and by 30 per cent compared to people's income.”
In light of statistics like these, Reuters recently conducted a poll of 16 Canadian housing experts and found that “almost all of them are worried that prices could fall after a decade of rapid growth.”
The experts seemed to agree, however, that a crash may likely be a few years off, and in fact, “prices are expected to rise 2.2 per cent this year, one per cent in 2015 and 0.8 per cent in 2016.”