A Housing Bubble in Canada?

By Elli Davis, September 4, 2010

Bubble by Kirsty Andrews

Canada’s housing market is in danger! A recently released report from the Canadian Centre for Policy Alternatives, suggests that our country may well be threatened by the possibility of a housing bubble. If we consider the fact that lately the only rising component in the Canadian real estate market has been the prices, this prediction seems to be quite logical.

According to CCPA, housing bubbles occur in cases when property prices are increasing more rapidly than economic growth, inflation and household incomes. As the centre discovered, home prices in June 2010 on average rose by about 14 percent compared to a year ago and six of the largest markets in the country are showing 30 year highs. The situation therefore does not seem quite stable.

Just shortly after we thought Canada and its real estate market was safe, we have to realize it may be just a wishful thinking. Let’s hope this report is just some kind of a warning which will not actually come true.

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