Canada's Epic Housing Bubble Dwarfs Past Price Surges

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New data reveals that Canada's real estate frenzy has vastly outpaced historical bubbles in other G7 nations. Experts from the US Federal Reserve Bank of Dallas tracked global home prices, finding most countries saw similar growth trends - until Canada's detached wildly in recent years.??

While Canada's housing market has seen a recent dip, home values remain 206.8% above 2005 levels. Comparatively, the mid-2000s US housing bubble that cratered the world economy saw a peak gain of 88.1%. Other G7 nations clocked more modest price appreciation, like the UK (+83.7%), Germany (+74.8%), and France (+53.7%) over the same period.??

Zooming out further shows the extremes of Canada's bubble. Japan and Italy both saw massive housing booms in the 1990s, yet prices today remain only 5% and 0.3% higher than in 1975, respectively. Canada's 1975-to-present climb exceeds 300%.?

Driving Canada's detached housing values are record-low interest rates and flexible lending that enable bidding wars. These tools increased purchasing power and speculation. Regional supply-demand imbalances also explain some frothiness. However, zooming out proves that the housing frenzy defies even the fundamentals of Canada's population boom.??

While recent policy moves to curb speculation provide some control, Canada seems to always support housing through thick and thin. With debt levels sky-high, the risk remains that tapped-out borrowers and skittish investors can trigger massive declines. Repeat bubbles elsewhere show that once speculative fever breaks, years of decline set in.

As homeowners face financial stress due to higher mortgage costs, the demand for rental properties, especially in the multifamily sector, continues to rise. Investing in multifamily rental apartments could be a strategic move in this uncertain market. To learn how you can benefit from this trend, contact me at 604.613.1693 or email me at aspitters@pfcwealthsolutions.com.

The source article, linked here, provides full details: Canada's Real Estate Bubble Is Batsh!t Crazy Compared To Other G7s

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