By Eric Jackson
05/19/10 - 06:00 AM EDT
real estate market, even as the U.S. market continues to limp along. Consider these eye-raising facts:Sphere: Related Content
Canada's real estate prices have increased on average 40% in the last year while incomes have dropped. Canadian residential real estate is now worth more today than it was pre-Lehman. There are now more dwellings built in Canada (assuming, as the Canadian government does, that an average of 2.3 people live in each dwelling) than the population of Canada. Canadian consumers have racked up enormous debts while interest rates have been low over the past 20 months. Personal bankruptcies are at record levels now in Canada when interest rates are still at historical lows. In Vancouver, people now spend 68% of their disposable income on housing. In Toronto, people spend 44% of their disposable income on housing. (Keep in mind that the China bears were complaining that it was unsustainable that some Chinese in Beijing and Shanghai were spending more than 30% of their disposable income on housing.)However, Canada's economy was going along okay pre-Lehman. Whenthe stock market dropped, Canadian housing and real estate activity stopped and prices did drop. But, with most consumers and the Canadian banks in okay shape, and with Canadian job losses not as bad (relatively) as in the U.S., Canadian consumers had quicker confidence to spend thanks to the lower interest rates.
........Canada might be America's neighbor to the north, but it has a bubbly