Fear of Housing Bubble seems overblown
One of the country`s leading economics think-tanks, the Conference Board of Canada, has become the latest entrant in the long-running debate over Canadian housing prices. Its take: no bubble.
This contrasts sharply with a report last week from the Canadian Centre for Policy Alternatives, which said Canada`s "housing bubble" is "an accident waiting to happen."
Back at the Conference Board, economist Mario Lefebvre acknowledges that home sales have fallen sharply this year, but points out that this is hardly a sign of distress after a period when sales were far too high to be sustainable. Instead, he concludes, it`s just a return to normal.
More important, on the price front, "there`s been no decline to talk about," Lefebvre said.
Prices rose in July from June in 19 of 28 Canadian cities and all 28 had prices that were above year-ago levels.
That`s not to say that prices will keep rising.
Lefebvre expects to see a "pause" in price growth for most cities in the next year or so as Canada`s economic growth slows. And prices could edge down by two to four per cent in the hottest western markets, like Vancouver, Calgary, Edmonton, Regina and Saskatoon. But that`s hardly a bust.
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