Every so often you will see one such article pop up in the media. Playing prophet or whistleblower is a professional hobby to some journalists/columnists, especially those covering economic stories. While such effort from an independent perspective is always great to have, I wish there could be more substance and more in-depth, investigative analysis included, rather than just a superficial, wide-angle scan backed with misinterpreted numbers/facts critical for understanding the situation.
There’s one sentence in the MacLean’s article that I couldn’t agree more: “When you hear about a homeowner who thinks his neighbour got too much money when he sold his house, you know there’s something going on.” My friend moved into a new Richmond Hill home a couple of years ago. The average price in the neighborhood was around $600K. But when the builder opened the next phase of development in that area 1.5 years later, the price jumped to over $900K. “Everyone is talking about it; it doesn’t sound right”, oh well, there was a long line-up for days at the Sales office.
The housing markets in Vancouver and Toronto were definitely over-heated in the past few years. The industry has been nervous and already took some precautions. You’d know it when you saw helicopters carrying senior bank executives circulate over Vancouver Island to make sure their hefty lending was extended to some real properties that truly exist. Those markets need a serious correction, but other parts of the country are just fine. Claiming a “great Canadian housing crash” is a long stretch, IMHO.
No doubt about the fact that the housing market is slowing down. Mr. Flaherty constantly put his foot on the brake and pressed it four times in a row. Finally the effect is showing and now, he must be anxious about when to switch back onto the gas pedal.
Cycles are driven by human nature and capitalism.