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Canadian Bank Officials Scoff at Idea of Housing Bubble

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There has been a great deal of talk regarding the recent performance of Toronto’s condo market. Sales and Pricing in Toronto’s market have skyrocketed in the past few months, leading to a significant boost in construction. As such, many economists are questioning as to whether the growth is sustainable. They also fear as to whether too much supply is being constructed without long-term demand.

 

In the past month, the average price rose fourteen percent in Toronto. The market also experienced the most housing starts since 2007. With the majority of the global market in a tailspin, many believe that such a strong performance is indicative of the reality that a bubble is forming. Canadian officials and bankers, however, insist that no such bubble exists nor will one exist.

 

Not all Canadian experts, though, are so confident. Some have stated that they believe that Canadians are taking on too much debt, and that they will not be able to afford these properties should the market collapse.

 

Most economists believe that the Canadian market as a whole is overvalued by as much as ten percent. While the majority of Canada has not seen much of what is known as overbuilding, there are certainly some sectors that have. Toronto is one of those sectors that are believed to be overbuilding in the current market.

 

Despite the fears, Toronto’s housing market has continued to show and prove in its results. Its tremendous increase in the last month defied expectations of most economists, who had believed that the average price would be roughly twenty thousand less.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

One Response to “Canadian Bank Officials Scoff at Idea of Housing Bubble”

  1. A.A. says:

    I believe that there’s a price bubble in Canadian housing, but not (yet) excess supply.

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