The real estate sector in Canada is in a bubble that could burst at any time according to the IMF, Deutsch Bank, the Bank of Canada and The Economist.
The Economist has determined that Canada’s housing market is
- the most overvalued in the world in terms of rent prices (+89%), and
- the third most overvalued in terms of incomes (+35%),
70% of mortgage lenders in Canada have expressed “concerns” that the housing sector is in a bubble that could burst at any time.
Deutsch Bank estimates the housing market is 67% overvalued and readily offers 7 reasons why Canada is in trouble.
Even hedge funds are starting to find ways to short the housing market in anticipation of an upcoming collapse.
Even by the Bank of Canada’s own estimate, the housing market is overvalued by as much as 30%. It is hard for housing to become more affordable when prices are rising in double digits in a year.
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