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Canadian Housing Market: The Most Overpriced in the World

Canadian real estate

The housing market of Canada has been recognized as one of the most overpriced housing market in this world. These overpricing issues have become hot topics talked about by different individuals who are enthusiastic about Canadian housing market. This information was based on a study that was carried out. The Deutsche Bank has actually facilitated a study and the results indicate that the Canadian market is overvalued in as much as 60% in a number of major markets. This gives Canada the lofty position in an unfortunate list.


For their further analysis, the Deutsche Bank has utilized a formula providing averages of two given metrics which include home prices in comparison to income and home prices compared to rents. The final overvaluation rates on these particular areas are 88% and 32% respectively. Several international news centers have gathered this information specifically the Wall Street Journal. This news outlet stated that several investors have given wide berth to Vancouver and Toronto.


The news came out right after the RE/MAX reports that were released Thursday, December 12. This noted that sustainability of 5-year high for average home prices along with desirable or favorable prediction of stronger market. However, there are numbers of individuals who feel a bit different regarding the performance of the market.


Canadian housing market is still suffering with changes on the mortgage rules that were implemented last July 2012. The higher household debt is also expected to challenge property owners when and if interest rates rise or increase. With net worth of an individual and high employment level tied to housing stock value, housing downturns can have serious impacts or consequences to the entire economy and this was a warning held by Fitch Ratings in a report. There are actually several underlying factors why Canadian housing market is considered as the most overpriced and you got to be somehow aware about these.

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