Is Canada's housing bubble about to burst? Capital Economics thinks so
The London-based research firm Capital Economics Ltd. has added a new spark to Canada's housing debate with its assessment that the country's real estate market is a bubble that is about to pop.
The boom in Canadian real estate has "resulted in the largest rises in house prices ever seen in Canada," the firm says.
"And the trigger of an increase in the Bank of Canada's trendsetting interest rates could result in a 25-per-cent drop in property values," it adds.
The organization released the research earlier this year in a report for its subscribers, and it received new currency from Bank of Canada Governor Mark Carney's statement warning Canadians that they should expect real estate prices to begin to moderate.
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