Vancouver Housing: Is it a "Bubble" going to pop?

(February 05, 2012 )

Canada's housing market is not a bubble, it's a balloon.  Unlike the catastrophic decline the U.S. housing market experienced in 2008, the market in Canada will deflate slowly rather than pop, according to a report by BMO Capital Markets. 

The main take-away from the report is that the national housing market appears some-what pricey, but is far removed from bubble territory.  In Vancouver, house prices have gone up 159 per cent in the last 10 years - compared to 104 per cent nationally.  While the economy isn't exactly booming, it is growing, and with interest rates expected to stay low,  it is unlikely that a sudden correction will take place.

This is consistent with Canada Mortgage and Housing Corporation's (CMHC) 2012 predictions, that the market will stabilize and show modest growth in line with inflation. 

“I’d say it’s a pretty stable market out there. We’re not expecting to see a lot of change going forward,” said Robyn Adamache, senior market analyst with CMHC in Vancouver.