Sarman, maybe my outlook is coloured, living in Canada, or maybe I am a pessimist at heart, but I agree that housing is grossly over valued, especially in the major cities like Vancouver, Toronto, etc. If you want to buy a house in Vancouver, it will cost you a million bucks. The value in comparison to many other cities next door in the US is far too extreme in the negative, and suggests that prices will collapse at some point. In addition, I read, and maybe posted on this thread that on the affordability scale, taking into consideration average wages etc., Vancouver is now the least affordable city in the world, topping New York.
I know the Bank of Canada is worried about real estate prices, and their response may well be to raise interest rates. Apparently that is not lost on prospective buyers, who now want to get in before that happens. Houses have been selling at above their listed price in many cases.
Higher int. rates will result in a higher Cdn. dollar at a time when jobs are scarce, costs are rising and debts are soaring. Not a pretty picture imo.
I have watched the real estate prices for decades, and for decades I have thought they were too high, and for decades I have been wrong, so take that for what its worth. |
