“In a report issued Wednesday, Merrill Lynch Canada economists said many Canadian households are more financially overextended than their counterparts in the United States or Britain. They said it’s only a matter of time before the “tipping point” is reached and the housing and credit markets crack in Canada.”
I normally try to focus on fact rather than opinion but I feel compelled to link to this story because this is the first time I’ve seen an economist who says what happened in the US could happen here.
I also must admit my irritation of the countless statements by pundits as to the sustainability of the Canadian property market. I sure don’t remember the pundits in Las Vegas, Florida and California telling people to sell their houses there two years ago. Still, to be fair, YatterMatters presents both sides of the story here.
It seems that many Canadians still believe that the property market is just fine. Canadian Mortgage trends points out: “We’re seeing a lot of applications for 100% financing as the Oct. 14 deadline* approaches.” It worries me that more Canadians aren’t more worried about what is happening down south. Read my early post, “The Great Canadian Housing Myth” to see why “Canadian property is affordable” arguments are nonsense. You can also check out my foray into “financial humor” via: “Never Let the Facts Get in the Way of a Good Housing Bubble.”
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* Deadline for getting those 0%-down 40-year mortgages.
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