Wednesday, July 23, 2008

The Canadian Real Estate Debate Goes On

Canadian Columnists Linda Leatherdale on 2008-05-04 posted on Canoe Money a timely article on the Canadian Housing Market - "Opening door on market"

"Some feverishly argue there's no way Canada's real estate market will crash and burn like the U.S. market, where one prominent analyst warns that the meltdown is more fast and furious than during the Great Depression".

"Others say, get real: Canada's largest trading partner is the United States, and if this one-time economic superstar is in a recession, we're going down, too".

Read the full article here.

The Royal Bank of Scotland recently released an advisory to its clients to braise for a "global stock and credit crash" over the next 3 months. The UK housing market may not recover until 2015. The housing market and debts problems in the US and UK, record high energy and food prices could eventually drag Canada into a housing down turn as we experienced in 1995 to 2001. Except, this time the problem could be very much worse than what we experienced previously.

Greater Vancouver Housing Market

The Saunder School of Business's housing chart for Greater Vancouver below shown that it took 8 years for the housing market to recover to it's 1981 peak at around $240,000. The housing downturn from 1995's peak at $420,000 took almost 9 years to recover. Using the charts presented here up to 2007, and plotting the trend lines for nominal and real prices, $540,000 seemed to be about the "right" price level where the Vancouver housing price should be. This represents a 30% to 35% price differential below the current Vancouver nominal and real housing prices.

Click here to read the blog.
View Vancouver homes for sale.

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