A Canadian Real Estate Bubble May Be Reality
The forecasts for a nationwide Canadian housing bubble have so far not become reality, and the real estate market has remained robust throughout the mortgage crisis that rocked the U. S. economy the past few years. Analysts were concerned that the Canada Mortgage and Housing Corporation’s (CMHC) plan to keep the credit circulating by approving high-risk loans had created an alarming 7.4:1 ratio of income to housing values — almost 50 percent more than the American ratio before the U.S. housing bubble burst. As a consequence of the CMHC’s policy shift, the average Canadian household debt underwent a 9.3 percent raise in only one year.
