In Canada, the rising price for the housing market has been a significant problem over time. Especially in Vancouver and Toronto, the housing price is appreciating at a rate that notably exceed the rate for the income growth. Therefore, houses are becoming unaffordable to purchase or to rent, particularly for the domestic residences.
In my opinion, Vancouver and Toronto’s housing market is rapidly appreciating because that these two cities are the most popular gathering place for immigrants due to their environmental and commercial advantages. Wealthy families from other countries immigrate to Canada and they are able to and willing to purchase houses at an excessively inflated price. Thus, this causes the western and eastern Canadian housing economy to rise. However, if this problem is left unsolved, it will cause serious issues like homelessness, unemployment, and or inflation.
Over the last five years, 21 out of the 26 markets around the world have their housing price risen at a median pace of 4.7%. According to their measure, property is more than 30% overvalued in six of the markets, including Canada. Only in five markets, including China, Singapore, France, Greece, and Italy, are the prices falling. The government has attempted to boost the market, and it is now slowly responding.
Bibliography:
http://www.economist.com/blogs/dailychart/2011/11/global-house-prices
