Problems seen in 10 out 15 major Canadian cities.
The Canada Mortgage Housing Corporation continues to issue warnings about the Canadian housing market, and their concerns extend beyond Toronto and Vancouver.
As reported by BNN, “On the whole, the Canada Mortgage and Housing Corporation (CMHC) said there was strong overall evidence of problematic conditions in the country’s housing market, the same threat assessment it gave in its last quarterly report in April.”
The CMHC says the Vancouver market appears to be becoming overheated. In Toronto, they see home prices as overvalued.
Beyond Toronto and Vancouver however, the CMHC sees “strong signs of problems” in five of 15 Canadian major cities. Meanwhile, they see “moderate signs of problems,” in another five. This points to the fact that our dangerous economic reliance on the housing market is not just limited to the two usual suspects.
What goes up, must come down
With housing prices far above any logical level, a price decline is inevitable. With interest rates expected to continue increasing, Canada faces a serious economic problem: Highly indebted homeowners who could simultaneously face higher debt payments and a loss in the value of their homes. That could certainly drive us into a recession, and it shows how dangerous it is for our “leaders” to restrict our tangible economy (energy production, manufacturing), in favour of intangible and unstable sources of “growth” (debt & an overpriced housing market).
Those policies have worked out well for the banks, but not so well for Canadians, and it seems the day of reckoning is drawing closer.