“I’m pretty wary certainly about the valuations in residential real estate. Would I be going out and buying a home today as an investment in Canada or in the [Greater Toronto Area]? Absolutely not. I would just as soon go in the stock market.”
David Rosenberg, chief economist at Rosenberg Research and one of Canada’s most respected economists, is issuing a warning about the Canadian housing market.
Rosenberg said, “This might be one of the biggest bubbles of all time,” in remarks that followed the Bank of Canada announcing interest rates would be kept at 0.25%, “Of course, it’s been predicated on where mortgage rates are.”
As noted by BNN Bloomberg, Rosenberg pointed out the disparity between the lack of wage growth, and the surge of housing prices:
“Rosenberg noted that a key national home price has experienced double-digit gains with virtually no wage growth to help Canadians keep pace. He described the relationship between income and home prices in Canada today as resembling the disparity between incomes and tech stocks during the dot-com boom-and-bust cycle.”
“I’m pretty wary certainly about the valuations in residential real estate. Would I be going out and buying a home today as an investment in Canada or in the [Greater Toronto Area]? Absolutely not. I would just as soon go in the stock market.”
You can watch an interview with Rosenberg below:
Much of Canada’s economy has become untethered from reality, and the housing market is no exception from that.
History shows that reality can be evaded for a time, but it always eventually reasserts itself, and the more Canada becomes reliant on easy money and debt, the rougher the inevitable correction will become.
Spencer Fernando
