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Prices might be plenty crazy but there are important differences. - The ability to move to dozens of other large cities. The three you named are the 3 largest

Prices might be plenty crazy but there are important differences. - The ability to move to dozens of other large cities. The three you named are the 3 largest english speaking cities. People are basically stuck in those cities for lack other large cities to move to. - Large projected population growth means plenty of people to prop up prices. - You can't walk away from mortgage debt the way you can in the US. - Lending rules are more strict and CMHC is a crown corp so it isn't going to go bust. You're a sucker if you save instead of buying property in Canada - and I include myself in the sucker category.

deleted 13y ago
[deleted]
refurb 13y ago
If you look at the indicators, Canada is in a worse situation than the US back during the peak of the real estate bubble: debt levels, housing inventory, etc. http://www.greaterfool.ca/wp-content/uploads/2014/01/chart.png?8f4c78 http://www.greaterfool.ca/wp-content/uploads/2014/01/chart.p... Also remember that Canada doesn't have 30 year terms to their mortgages. Most people have 5 year terms. When rates go from 3% to 6% (which is still historically low) you'll see a lot of people who won't be able to afford their payments. At least in the US you're locked in for 30 years which can reduce the likelihood of not being able to afford your payments. The other issue is that some lenders are enforcing an 80% loan to value ratio. In other words, when you get to the end of your 5 year term and you only have 15% equity in your home (because of a drop in value), the lender may demand the other 5% (in cash) or else you don't get financing. And in terms of lending standards, yes, Canada tightened those up, but for a while you could buy a house with 0% down and a 40 year amortization period. That did nothing but push prices even higher. I'm not saying Canada will see a exact repeat of what happened in the US, but a correction will come and it won't be pretty.

deleted 13y ago

[deleted]

refurb 13y ago

If you look at the indicators, Canada is in a worse situation than the US back during the peak of the real estate bubble: debt levels, housing inventory, etc. http://www.greaterfool.ca/wp-content/uploads/2014/01/chart.png?8f4c78 http://www.greaterfool.ca/wp-content/uploads/2014/01/chart.p... Also remember that Canada doesn't have 30 year terms to their mortgages. Most people have 5 year terms. When rates go from 3% to 6% (which is still historically low) you'll see a lot of people who won't be able to afford their payments. At least in the US you're locked in for 30 years which can reduce the likelihood of not being able to afford your payments. The other issue is that some lenders are enforcing an 80% loan to value ratio. In other words, when you get to the end of your 5 year term and you only have 15% equity in your home (because of a drop in value), the lender may demand the other 5% (in cash) or else you don't get financing. And in terms of lending standards, yes, Canada tightened those up, but for a while you could buy a house with 0% down and a 40 year amortization period. That did nothing but push prices even higher. I'm not saying Canada will see a exact repeat of what happened in the US, but a correction will come and it won't be pretty.