David Rosenberg, chief economist with Gluskin Sheff & Associates Inc., says housing values are 15% to 25% above where they should be based on personal income and residential rental rates…Bank of Montreal Economist Douglas Porter says “We’re on the bubble of a bubble…we could see a bit of a buying frenzy this coming spring…followed by a ‘pop’ in 2011.”…
(Source: The Vancouver Sun)
What a difference a year makes. Last November, the economy was said to be on the verge of the next Great Depression, sucking the life out of a housing market that was coming off a record year in 2007.
Flash forward 12 months. The Canadian Real Estate Association said yesterday existing-home sales in November were up 73% from a year ago and prices rose 19% during the same period. The fear now is that the housing market is too hot, stoked by record-low interest rates.