Talking ‘Aboot’ Canada’s Housing Bubble – Developments – WSJ

Talking ‘Aboot’ Canada’s Housing Bubble

In the U.S. we’re still mucking around at the bottom of the crash (or the false bottom), but in Canada recovery has been so rapid that some there are worrying about (aboot?) a bubble. WSJ reporter Phred Dvorak wrote yesterday about rising home prices in the country.

One index that tracks Canada’s six biggest cities posted its seventh straight monthly gain, Ms. Dvorak writes, and prices in November are now back to prerecession peak.

Citing a report from the Canadian Real Estate Association, the Globe and Mail said Monday that house prices will hit a record C$337,500, on average, in 2010 and sales activity may hit an all-time high. Fueling the rise: Low mortgage rates. On some loans rates have fallen to 2% or lower. However, these aren’t fixed. Nearly all mortgages in the country have rates that adjust every few years. One Canadian investor bought six units last year with rates ranging from 2.45% to 3.95%.

And while some economists think prices are high, not everyone is concerned about a bubble.  The country’s finance minister told the Globe and Mail that “there is no compelling evidence of a housing bubble in Canada.” Although he says they are watching the market.

Some expect demand to cool off once rates go up.

All this got me thinking: How long before the next bubble in the U.S. market?

Posted via web from Toronto Real Estate News | Blog

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About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

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