The Canadian Housing Bubble
Canada is a developed western nation. It does not get nearly as much attention in the world media as it should. This is the reason why Canadian housing market is not being displayed in the news by the mainstream media. Right now the market is going through an incredible bull run. The prices are rising as high as 33% in many cities in a single year! This can be compared with the relatively dull housing markets all across the world and understand why it is a problem. Most of the people buying the houses are not paying cash. They are taking out mortgages, and as a result, the Canadian economy has mortgages worth $2.2 trillion outstanding even though the entire GDP is only $1.6 trillion. A mortgage debt worth 150% of the GDP is not a sign of prosperity. Instead, it is a sign of crippling debt that can cause the entire economy of the nation to collapse.
In this article, we will study the Canadian housing market in greater detail. We will also understand the cause behind this bubble and also some of the effects that it is having.
Causes behind the Canadian Housing Bubble
Effects of the Canadian Housing Bubble
To sum it up, the Canadian real estate bubble is causing a lot of damage even before it has gone bust. Once the prices go under people are likely to lose their life savings like they did in countries like Japan.
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