Canada's Housing Bubble

Sep 27, 2010 Richard Dettman News1130

Vancouver - Canada's least affordable housing market became even less so in the second quarter, according to a report by Royal Bank.  RBC Economics Research says "the high-flying Vancouver market is probably the closest (to a housing bubble) in the country."

Economist Robert Hogue adds "very poor affordability (is) likely playing a role in the steep drop in the resale market since the start of the year."

The bank adds the ownership costs of a detached bungalow in Vancouver takes up 74 per cent of a typical household's monthly pre-tax income.  Toronto is a distant second at 50 per cent.

Hogue explains "even though the Vancouver market is clearly vulnerable to a price correction, this does not imply that a collapse is imminent because existing and new home supply is well contained at this point."