- Canadian real estate is worth more now than before Lehman Brothers declared bankruptcy in 2008
- There are more homes in Canada (assuming an average of 2.3 people live in each home) than the population supports. Yikes!
- Personal bankruptcies are at record highs despite the fact that interest rates are at record lows (which indicates that people will be unable to bear the inevitable higher interest rate burden).
- While China is worried that consumers spend 30% of their disposable income on housing, in Toronto and Vancouver residents spend 44% and 68% of disposable income respectively on housing.
- Property values have increased substantially in the past year while incomes have actually decreased.
Over the last five years, the CMHC’s liabilities– meaning the mortgages they hold on their books — have gone up five times from C$80 billion to C$400 billion. Any time you see a business increase its liabilities by that amount, it’s intriguing. When you consider the last two years has been the worst economic downturn since the Great Depression, it’s even more head-scratching. Nuwire Investor
Toronto experienced a mini-housing bubble in the late 1980s. Then, interest rates rose and prices crashed. On an inflation-adjusted basis, the average price of a home dropped 50% from 1989 to 1996. Nuwire Investor