From Globe and Mail
It's funny how media manipulates information just to make a headline. Please consider an article from just a month ago by the Globe and Mail, titled Frozen Out: Behind Canada's Housing Affordability Crisis. The basic premise of the article is that low interest rate is just masking the risks of how unaffordable housing has became. Sounds like the Globe and Mail is suffering from indecisiveness. Furthermore the above article ignores all the other issues such as record high levels of debt in Canada, house prices outpacing incomes for over a decade, record rent to price ratios etc. Additionally, the article states:
Moreover, credible analysts don’t see a U.S.-style crash. Professor Robert Shiller told CBC News in September that Canada should be spared because its banks have low subprime exposure. And Gluskin Sheff economist David Rosenberg wrote in a November note “that the U.S. plunge five years ago followed years of credit-tightening moves… anyone think that [the Bank of Canada] is going to raise interest rates 450 basis points with inflation barely above 1 per cent?”However, Mister Shiller also said that Canada is like a slow-motion version of the US and that Canadians suffer from same delusion that Americans did, that real estate prices always rise.
We are not talking ourselves into a housing crash We are talking about a coming real estate crash because of the fundamentals. As one of the commentators of the article said: - This isn't a matter of changing public thought. Rather, it is a matter of changing the public's awareness of economic truths.