The past week saw the “Is There A Canadian Housing Bubble” pendulum swing decidedly toward the No camp. First, economists at TD Bank made the case Toronto’s market isn’t significantly overvalued, and that price growth will cool gradually over the next few years. Then BofA Merrill Lynch argued the housing market will experience a “measured unwind” and that “the Canadian housing market is built on stone, not sand.”
Finally, Will Dunning, the chief economist at the Canadian Association of Accredited Mortgage Professionals, set out to dismantle the oft-cited claim that the price-to-rent ratio in Canada is 88 per cent higher than its long-term average. His conclusion: “house prices in Canada are under-valued (relative to interest rates and rents) by as much as 20%.” But...
Finally, Will Dunning, the chief economist at the Canadian Association of Accredited Mortgage Professionals, set out to dismantle the oft-cited claim that the price-to-rent ratio in Canada is 88 per cent higher than its long-term average. His conclusion: “house prices in Canada are under-valued (relative to interest rates and rents) by as much as 20%.” But...