Author Topic: Canada's Housing Bubble Will Burst  (Read 794 times)

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Offline J P Sousa

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Canada's Housing Bubble Will Burst
« on: July 27, 2017, 09:25:49 PM »
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by Ben Carlson
‎June‎ ‎21‎, ‎2017‎ ‎10‎:‎00‎ ‎AM

  Canadian home sales fell the most in five years last month. That didn’t stop an increase in prices, which were up 18 percent nationwide from a year earlier. When you consider that most houses are leveraged assets, this represents huge gains for homeowners.

While leverage can help boost performance on the way up, it becomes very dangerous on the way down. Leverage can turn even the best investments into poor ones when things go wrong, as losses are amplified. Equity can get wiped out pretty quickly on an overleveraged asset.

Canadian real estate has been on fire for years. The housing price data there has made the U.S. real estate market during the boom of the mid-2000s look mild.
https://www.bloomberg.com/view/articles/2017-06-21/canada-s-housing-bubble-will-burst

 

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Canada: Undersaved, Undiversified, And Unprepared For Mean Reversion
Apr. 27, 2017 1:19 PM ET
Danielle Park, CFA

Unfortunately, Canada is unprepared for the secular mean reversion that follows secular booms. Thanks to overconfidence and malinvestment in highly inefficient assets like the Alberta tar-sands, egregiously priced real estate, and non-productive consumer goods, Canada has now earned an extended rough patch in the payback period.

(break)

Home Capital shares ballooned with the household debt bubble into 2014 and have since lost 86% on revelations of widespread fraud and management cover-ups. This darling of the Canadian housing boom may well be a canary in the coal mine, reminding of what happens when excess leverage and reckless risk-taking become a national obsession.
 https://seekingalpha.com/article/4066166-canada-undersaved-undiversified-unprepared-mean-reversion

 
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"Canada Is In Serious Trouble" Again, And This Time It's For Real 
by Tyler Durden Jul 13, 2017

http://www.zerohedge.com/news/2017-07-12/canada-serious-trouble-again-and-time-its-real
 

Looks like Canada is in big trouble financially.

Canada recorded a government debt equivalent to 92.30 percent of the country's Gross Domestic Product in 2016.

The Canadian housing market is about to collapse, household debt continues to rise and Canadian banks are in trouble. 


Stupid Rolling Stone thinks Justin Trudeau should be our president.  :rotf:



« Last Edit: July 27, 2017, 09:28:10 PM by J P Sousa »
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