A friend of mine shared this video with me, a speech by Pierre Poilievre, MP for Nepean-Carleton, on April 4, 2012, spoke on behalf of the Government on Budget 2012. He is incredibly eloquent, insisting that Canada is not going down the path that the US took. Yet here’s a sobering headline.
Of course, he’s wrong. Even back well before April of this year you could see the froth in cities like Toronto. In Vancouver, sales have now fallen sharply.
Earlier this year I was quoted in the Toronto Star as some sort of bubble veteran that broached the subject of a bubble and I was not surprised to hear the same rationale we heard in the US. Toronto new development was focused on small units to be purchased by investors to rent or flip although defenders rationalized that was how workers would move to the city to expand the economy. Deja vu.
Many believe that Canada is different because prices will only fall for the next few years unlike the US where it was a 6 year fall (2006-2012).
Well, that is still a correction or bubble for nearly the same reasons as the US: government policy, speculation and cheap credit.
My eureka moment
I have long thought that all the housing shows on HGTV ie “Property Brothers”, “Holmes on Homes” etc. were filmed in Canada instead of the US because production costs were cheaper – no! My theory: After the US market tanked in 2006, production was much easier in a housing market where prices were rising, marketing times were fast and credit was readily available. That’s why these shows have continued where “flip this house” in California left off….for now.
Tags: Canada, Canadian Housing Market