Is Canada in a housing bubble?

Most experts believe that Canada isn’t in a housing bubble, but we’re pushing it. Property prices have increased by over 20% since 2021 and have kept going up. In February of 2022, Canada’s housing prices reached a record average of $816,720. What happens when a housing bubble bursts?

What causes a housing bubble?

A housing bubble happens when the increase in real estate prices is fuelled by demand and not the economy. House prices go up, but the increase can’t be explained by logical reasons, like demographic changes, interest rates or job creation. Something similar happened in the United States just before the 2008–2009 recession.

Is there a real estate bubble?

That’s a sign of a real estate bubble, since excess growth is sunk into a non-productive asset. Non-productive means it doesn’t provide more goods or services, regardless of cost. It could cost a nickel or $1 million, but it does the same thing for output. The US Housing Bubble in 2006 is the best known example of housing consuming GDP.

Will Canada's housing market crash in 2024?

The Canada housing bubble has been a concern for Canadians for some time now, and, sadly, the housing crisis grew worse during the pandemic. Professionals have forecast the possibility of a market crash occurring in 2024, as housing prices will continue to rise.