It is exactly two years since this thread started and back then ago the consensus was that Canada was in a housing bubble about to pop. Yet not only has there been no pop, but prices have continued to rise.
I am not saying that there are no serious concerns nor am I suggesting that there may not be a pricing correction in the Canadian housing market. However, the Canadian market is not quite the same as in the U.S. and many other countries. A lot of people here have a reasonable amount of equity in their homes above their mortgages and many mortgages are insured by the Canadian Government (CMHC). In the past we have seen CMHC step in to help stabilize prices during a correction and when prices dropped in the past they rebounded fairly promptly.
Remember the law of supply and demand. At one time we used to have nuclear families where 2, 3 generations would live in the same house. Now it seems everyone has their own house or condo.
In general our population is well educated and many singles live in their own homes and condos. Today’s high divorce rates means you now need two houses where previously only one was needed. Immigration also drives our housing industry.
Here is something else that seems to be overlooked. Our houses are more expensive to build and probably last longer because of that. They have to meet high snow load criteria, withstand high winds and very cold temperatures. That means a high quality level and makes them more expensive to build. Materials are also expensive because they must travel greater distances to and service smaller markets in many cases. Our houses must be very well insulated, require much more expensive heating systems, and because our houses are built tight we often require air exchange systems to keep the air fresh and humidity levels in check.
So perhaps our housing is expensive, but there may be more value in them as well.
Just my opinions.
