In a National Post editorial Tuesday, Mike Brock, editor of TheVolunteer.ca, said, “We’re in no better position than the United States.”
Traditional arguments defining Canada’s differences from the U.S. market, such as Canada having a stronger banking system and more stringent lending practices are “manifestly wrong,” he wrote.
“The fundamental problem with the argument that the U.S. economy imploded because of lack of regulation, is that it assumes the problems sparked at the periphery were themselves the problem, rather than the spark,” Brock said. “I contend the former is true. The rot began a long, long time before the subprime mortgage exuberance started in earnest.”
The problem wasn’t subprime, it was the whole mortgage market, he said. Brock joined an increasing list of public calls to end or reform the CMHC and Bank of Canada’s control of interest rates. “The sooner it happens, the less painful it will be,” he said.
Another web editor, Andrew Mickey of WealthDaily.com, also recently called Canada’s market a bubble, going even further than Brock in regards to Vancouver’s market.
“There have been reports of 100% profits in as few as four months on some of the most sought-after real estate,” Mickey said. “It’s worse than the U.S. real estate bubble, and it will end just as badly.”
But while bubble talk has increased, most mainstream analysts of the Canada real estate market have predicted a more stable future, backed by low interest rates and continued strength in employment and immigration figures.
“Ultra-low interest rates will continue to support affordability in the face of record high prices,” said a Scotia Economics report out last week.
In its latest report, the CMHC said there will not be a price correction this year, and the market will continue to see gains next year.
Learn more about this hot topic during the Regional Economic Forecast session at the InvestorForum Vancouver 2011. www.theinvestorforum.ca
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate