Further Bank of Canada warning on housing market

[Roy N.]

This is the third such statement from the BoC in the last quarter. 

Bank of Canada says housing, debt threaten financial system

But the many, many homeowners, investors and pendants who have drank from the fountain of "housing prices only go up", assure us the BoC and a growing contingent of the Country's economists assure us it is just naysaying.

[Roy N.]

@Kris Mcfarlane

What matters most is the rate of divergence of housing prices from household income.  Vancouver is already the second least affordable market on the planet (next to Hong Kong) with housing prices average 11+ times household income.

While it is likely the market in Vancouver will not post the year-over-year price increases in 2015 that it did in 2014, the reality is that prices need to start declining (or incomes increasing dramatically) to avert a housing crises.

Over here on the other end of the country, you can thank the Maritimes for holding the Canadian housing price average to just 5.7 times household income.  Sadly this has more to do with anemic economic growth regionally (there are a few bright spots), than common sense not to chase a housing price train.  Moncton, NB was rated as the most affordable housing market in Canada for 2015, but that does not mean one can be careless and buy anything as an investment.