Cliff Peskin

BuzzBuzzHome Corp

April 1, 2011

Americans and Canadians are eying down each other’s housing markets. Canadians are salivating at cheap US Property ripe for the picking. Americans are scratching their heads at Canada’s booming market and prophesying a collapse in Canadian real estate on par with their own.

This week the Wall Street Journal ran an article entitled Housing Booms North of the Border. The authors Monica Gutschi and Don Curren write that Canada home prices are being fueled by a binge in borrowing that has sent Canadian debt to record levels – even higher than that of the US.

The article quotes experts as saying Canadian housing prices could be in for a 25% drop in the next three years due to the inflated ratio of house prices to income. Home prices have risen to almost 5.5 times disposable income per Canadian worker, above the historical average of 3.5.

Canadians are unperturbed though by these doomsday predictions. Sal Guatieri, senior economist at BMO capital Market, says simply, “Canada’s market is not in the midst of a bubble.”

In fact, not only are Canadians shrugging off these dire predictions but they are plotting their invasion of the battered American property market. According to a recent BMO survey one in five Canadians would consider buying a U.S. property.

Of particular interest to Canadians, coming out of a long and cold winter, are hard hit cities in the US sunbelt: prices in Tampa have dropped 44%, Phoenix 54%, Las Vegas 67% and Miami 49%.

So, it’s an old fashioned stare off between North and South. The Americans, wounded and vulnerable, vs the Canucks, drunk on loonies and readying their attack.

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