"There is danger from all men. The only maxim of a free government ought to be to trust no man living with
power to endanger the public liberty." - - - - John Adams

Friday, March 16, 2012

Great - Now a Canadian Housing Bubble

A Toronto home for sale. Ontario home prices have jumped roughly 30% since their crisis troughs, lending to worries about a Canadian housing bubble. 

Here we go again.  A massive government funded housing bubble.

  • An insane below market 1% interest rate to feed an economic bubble.
  • Like Americans, the Canadians are getting equity lines against their homes, going massively into debt and spending like madmen.
  • Will Canadian banks get pulled under by bad loans?
  • Living within your means in "old fashioned".

I have concluded that the more education people have the more stupid they act.  
Case in point, economists are fucking morons.  The European economists have bankrupted the continent with endless bad loans.  Chinese economists urge the building of phony  "Ghost Cities"  to create jobs.  And Americans economists . . . . they should be put in jail.
Now we are looking at a government created bust in Canada.  It looks like every nation is spending more than they make.
The Bank of Canada announced it would maintain its insane interest rate at 1%, which the central bank has kept steady since September 2010.

House prices in Canada have doubled in the past decade, with double-digit growth in the past few years. In British Columbia and Ontario, for instance, prices grew by 41% and 29% since their crisis troughs in the past few years, according to a 2011 country report on Canada by the International Monetary Fund reports Market Watch. 

Alongside these gains, Canadian homeowners have become more debt-strapped. The level of household debt relative to disposable income has accelerated to 153% in 2011, versus 110% in 1999, Statistics Canada said.
The rising trend in the debt-to-income ratio “flags the fact that Canadians are becoming more leveraged and are more vulnerable to an economic shock than they were heading into to 2008/2009 recession,” Craig Alexander, chief economist at TD Bank, said in a report. 
Fallout from a housing crash would hit Canada’s biggest banks hard.   (Market Watch)

The Canadian Housing Bubble and Bust

1 comment:

Anonymous said...


Note Canadian housing sentiment is changing, see table 1