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

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

Analyst: Canada’s housing market is ‘Loonie Tunes’
 
Contributing to the impending burst bubble, according to Mansharamani, is rapidly rising household debt that far exceeds GDP, house prices that have continued their upward march, and the falling price of crude oil – all of which will be felt across the country.
 
The naysayers point out that the impact of oil prices is a regional phenomenon, and that Alberta is not Toronto. But consider that, over the last four years, Alberta was responsible for between 50 and 85 per cent of new jobs created in Canada.
 
“Without the Alberta employment gains, Canada would have a nine per cent unemployment rate,” said Mansharamani. “It is oil that has helped create that strong economy.”
 
And many of those workers were “fly-boys,” flown from across the country to work in Alberta. “If there isn’t the work, they’re not going to fly to Alberta,” he added. “If they’re at home, what does that do to the labour markets in each of those local regions? It puts downward pressure on wages, it puts upward pressure on unemployment and it creates a slower consumer spending rate.”
 
The housing bubble burst is just around the corner, Mansharamani added on his website. “In this Loonie tune, it seems our Crazy Canadian Coyote has run off the cliff, his feet are still moving, but he has yet to look down. He’s suspended in air, and it’s only a matter of time until gravity exerts its force.”

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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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