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Sunday, February 07, 2010

New Housing Bubble in Canada?

by Calculated Risk on 2/07/2010 09:51:00 PM

From the WSJ: Housing Rebound in Canada Spurs Talk of a New Bubble

Canada's housing recovery has been so rapid that some here are worrying about a bubble.

Last Wednesday, a housing-price index for Canada's six biggest cities posted its seventh straight monthly gain, showing home prices in November are now back to their prerecession peak. Another broader measure shows the average home price in 2009 hitting a record.
Canadian banks typically reset adjustable-rate mortgages every few years, those who are buying now at low rates will likely see increases soon. ... The Bank of Canada warned in its December report that if interest rates increase as expected, by mid-2012 about 9% of Canadian households could have so much debt that they'd be "financially vulnerable."
Just something to consider ...