A Look at Canada’s Real Estate Bubble

The world financial crisis that began around 2008 with the US housing bubble has led to other countries slowing down their own real estate industry. Some five years later, most markets seem to have recovered and are on their way back up again. This doesn’t mean that the housing bubble hasn’t popped however. In some countries like Canada, the bubble can still be seen with a few tell- tale signs.

It’s true that in general, housing prices have become more affordable. There are instances however that go against this statement. For example, a 1960s type bungalow with three bedrooms was recently sold for over $ 1 million dollars in Toronto. The most shocking fact is that the buyer was just an ordinary upper middle- class family. This can already serve as a warning that housing prices are continuing to climb, albeit at a slower pace.

Canada’s government agencies responsible for ensuring that the same crisis in the US won’t happen up north have done all they can to ensure this objective. To some extent, they have performed admirably, lowering national mortgage rates to affordable levels. This has encouraged buyers to purchase homes sooner rather than later, but with lower interest rates, there is a chance that speculators might push the bubble up, spurring inflation too fast, and Harper’s deregulation agenda promises to open up Canada to the same risks as the America faced by destroying the regulatory infrastructure required to stave off collapse.

Those looking to buy or sell a home should be prudent in this economy. While everything seems alright on the surface, only time will tell if the previous housing bubble is gone for good.