If being 15-per-cent to 35-per-cent overvalued isn’t a bubble, then it’s the next closest thing

(Source: Globe and Mail)

Is the Canadian housing market in a bubble? It sure looks that way.

At a time when personal income is down about 1 per cent over the past year, we have seen nationwide average home prices soar 21 per cent to hit a record high, as did home sales. Even factoring in inflation, home price appreciation is now back to where it was in 1989. Back then, interest rates were far higher, but the economy was also in the late stages of a phenomenal expansion, not making a transition from deep recession to nascent recovery.

As to the question of whether home prices are in a bubble, if it walks like a duck…

Read David Rosenberg’s full article “Floating high on a delicate housing bubble” in the Globe and Mail (December 11, 2009).

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