Analyst: Canada’s housing market is ‘Loonie Tunes’

Analyst: Canada’s housing market is ‘Loonie Tunes’

Analyst: Canada’s housing market is ‘Loonie Tunes’ In the most colourful language to date, an American analyst agrees Canada’s housing market is nearly 50 per cent overvalued – and it’s not just an Alberta problem.
 
Another well-respected analyst has added his voice to the conversation about an unprecedented housing boom, one he argues is likely to bust – and when it does…
 
“It’s not unreasonable that we could see house prices fall by 30 to 50 per cent,” Vikram Mansharamani, a global equity investor and lecturer at Yale University, told MBN sister publication, CREW. “It will pinch the entire economy and have an impact on consumers. There is a material risk that it will spread across the country.”
 
Naysayers who have refuted other claims of overvaluation – most notably by the Bank of Canada and the International Monetary Fund – point out the regional nature of the Canadian economy, problems felt in Alberta, for instance, won’t reverberate to hot markets like Toronto and Vancouver.
 
But Mansharamani wrote on his website that, during a recent visit to Canada, he “noticed a schizophrenic oscillation between housing exuberance and oil-price despair” and concluded that “Canada is now among the most vulnerable large economies in the world.”


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29 Comments
  • Davelle Morrison 2015-03-26 12:11:34 PM
    I love it when all of these naysayers who actually don't understand our market and why it's different than the US market come across the border to wag their finger at how great our market is doing. What I'd love to see is a year by year account over the last few years of what the negative pundits said about the housing market compared with how much it escalated that year. Why don't we ever follow-up with these negative predictors and see where they are the following year?
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  • Hal Tagg 2015-03-26 12:12:20 PM
    He doesn't understand the oil market. The price of oil has plunged before and it will plunge again. Each time it bounces back.

    This time is especially different though. This plunge was not cause by a global market, but rather by Saudi Arabia who wanted a larger market share. When the Saudis get a new agreement on production reductions that they want, effectively strengthening OPEC, then production will be reduced, and prices will bounce back up. $50 a barrel is not the new norm.

    A 30% price reduction in housing is laughable, even in Alberta.
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  • judy 2015-03-26 12:26:58 PM
    Does this writer do the "shot-gun" approach to try and find these people who give him and his employer the sensational news they want to publish? I'll bet I could find the same quality experts at a barstool in the local tavern!
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