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One of the really terrible narratives we’ve allowed to develop in the minds of Canadians is that somehow we are better than the U.S. and so that means we have nothing to be concerned about

the end of 2010, the average homeowner had just 34.3 per cent equity in their home

I want people who are considering buying a house in Canada to be the most frightened. People who just bought a house also have every right to be nervous. But even if you don't have a stake in the property market, I would like you, too, to be fearful of a bubble in Canadian property.

Unlike in the United States, it is very hard for Canadians to walk away from their mortgage responsibilities. Mortgage insurance protects your bank, not you. Here, a default is not a get out of jail free card

In Canada, mortgage interest cannot be deducted from your taxes. Instead, we only benefit by getting tax-free capital gains after you sell.

The real price of Canadian homes has increased by 85 per cent on average since 1998. Prices stagnated in 2008, at the height of the financial crisis, but they were back on the rise again as soon as 2009, when they grew by nearly 20 per cent

the debt burden of Canadian families stands at 153 per cent of their disposable income

Canadian market is overvalued by over 70 per cent

A housing market correction will put extreme pressure on those of us who are barely keeping up with debt.

Property supply will go through the roof, and anyone who can’t carry mortgage payments will be forced to sell low or risk foreclosure.

When interest rates fell to 75-year lows in April 2009, the sensible thing would have been to pay off loans. Instead, we borrowed more

Canada as a whole does not face a housing bubble that requires government action, Finance Minister Jim Flaherty said on Wednesday

warned Canadians not to take on so much debt that they will not be able to service it when interest rates rise.

Canada as a whole does not face a housing bubble that requires government action, Finance Minister Jim Flaherty said on Wednesday.

Previous failures of Canadian financial institutions were due to bad real estate lending and sharp falls in housing prices, and these can happen again,

Canada’s banks, ranked the soundest on the planet by the World Economic Forum, aren’t immune to collapses triggered by falling housing prices, according to the government official implementing new mortgage rules.

Canada is not immune,”

We have no subprime lending to speak of. It’s negligible

Canadians with no income, assets, and documentation weren’t allowed to get no money down mortgages on overpriced houses, the housing market hasn’t and won’t suffer the same consequences

Introduced by Finance Minister Jim Flaherty last January, the changes reduced the maximum amortization to 30 years from 35 years for a government-insured mortgage, reduced to 85 per cent the amount Canadians could borrow against their home equity, and ended government-insured home equity lines of credit.

the average price of a detached home in Canada has doubled since 2000, and in September was sitting at $331,000

the Canadian household debt-to-income ratio hit a record high of 148.1 per cent in the third quarter. That is slightly above the 147.2 per cent debt ratio seen in the U.S.

household debt has jumped by seven per cent since the recession bottomed out, compared to a fall of 3.5 per cent in the U.S. And most of the household debt in Canada can be attributed to mortgages, which have grown from $421 billion in 2000 to more than $1 trillion today, a 137 per cent increase in 10 years.

Overvalued housing markets in several Canadian cities and high household debt poses a "clear and present danger" to Canada’s economy

The report flags Vancouver as the market with the greatest risk of a housing price correction, because of an influx of foreign buyers, likely in the order of 10 to 15 per cent.

overbuilding in the condo market

Finance Minister Jim Flaherty has warned that Canadians are taking on too much debt against the value of their homes, and that could spell trouble.

latest report from the Canada Mortgage and Housing Corporation is dismissing those fears, saying there's no 'clear evidence' of a real estate bubble.

home sales have dropped

Bank of Canada “has indicated that it is likely to remain at 1.0% for 2012,” prompting a strong denial by the central bank itself.

Rock-bottom mortgage rates have fueled Canada’s housing boom, but they have also raised concerns over record-high household debt as many consumers take advantage of cheap lending costs while they last. Higher rates could push many households beyond their limit and out of the market, and that could lead to a drop in prices, especially in the over-development condo sector.

On Tuesday, CMHC also reported housing starts jumped 14% in April, mainly for multi-unit construction,

If we examine the 1989 bubble, there are clear indicators that speculators relied on short-term gains as a primary income source, which resulted in artificial and unsustainable rising home values

In today’s Ontario real estate market, the environment is different; wages are increasing, immigration is up, speculators are few, employment is rebounding, and lending regulations are strict.

Fixed mortgage rates have been dropping in recent weeks (3.69%) which will also help sustain a healthy fall real estate market. Variable rate mortgages (2.05%) still work out mathematically better even if rates gradually rise over the next 5 years.

"Expect the housing boom to cool rather than crash,"

unlikely to continue unless mortgage rates drop much further, neither is it likely to bust.

home values are indeed rising at a faster pace than they used to, but the signs are pointing to a soft landing where prices stabilize — not a hard correction where prices drop quickly by 20 per cent or more.

In the U.S., the per-capita value of the housing stock got wayyyy above trend in 2003 and 2004, climbing by 22.5% in just two years. Canada never did get that out-of-control over any short period of time, by this measure. At the same time, though, we did have five consecutive years (2003-07) of 7%+ growth. The U.S. has more or less reverted to trend, and we haven’t: we’ve merely cinched in the growth rate (working against the allure of cheap mortgages as best we can by means of lending policy) and hoped that no radical adjustment will be necessary. A few years of slow growth would be excellent news for us, given that the alternative might be the more-or-less wholesale destruction of entire conurbations that has been happening in the U.S.

Canada may have some local bubbles

British Columbia, for example, you find that the Olympics combined with the general climate of insanity from 2003-06 to drive 9%+ growth for the whole province every year, with a peak of 11.3% in 2006.

stopped short of saying a housing bubble exists in Canada.

condo markets in Toronto and Vancouver as being particularly unsustainable.

issues particularly in some parts of the country, in the condo market,

said the housing market is not in a bubble,

The annual pace of home starts rose 14% to 244,900

Canadian housing starts rose to the highest since September 2007 last month

Nearly three times’ more condo high-rises are being built in Toronto than are being built in New York City and nearly seven times’ more than in Chicago, according to Bloomberg News.

Conventional wisdom is that this is the market at work. This is not the market at work. This is manipulation of a government system of open-ended mortgage insurance that is poorly supervised.

What is going on here is a deluge of hot money from abroad that is creating an artificial and potentially dangerous real estate bubble.