Canadian Housing Market Looking for Balance

The Canadian housing market is in for an “exceptionally healthy” year in 2014 according to a forecast by real estate leader Re/Max, yet concerns of a “housing bubble” continue to surface. A surging housing market and high consumer debt has been aided by low interest rates intended to spur economic recovery.

Canadian household debt is at a historic high of $1.63 for every dollar earned. “The high level of household debt and imbalances in the housing sector are the most significant domestic vulnerabilities to address,” said the Bank of Canada in its semi-annual Financial Systems Review. “If the upcoming supply of units is not absorbed by demand as units are completed over the next few years, there is a risk of a correction in prices and construction activity.”