I recently read Shiyun Liu’s Economist predicts long, painful housing correction blog. I learned about nowadays, housing became to biggest problem in the world, the housing price is actually higher than people’s income rate, this means people cannot afford to buy a house in their country.
From this chart we can know that housing price is raising trend from 1997, and from 2007 to 2009, the price was increased a lot, from those years, Canadians cannot afford to buy houses, but people who immigrated from other countries are the big buyers in Canada, because Canada is a immigrate country, lots of people come from other countries and they want to buy house when they arrive here, but houses are limited, therefore they have to increase the housing price and then Canadians cannot buy houses because their income is actually lower than the housing price. When people cannot afford to buy a house they have to rent a house to live, when more people want to rent houses, the rent price will be higher, and have shortage in the market.
This chart is about house rent price and income price, as we can see that the income price is lower than the rent price, therefore people might can afford to rent a house in the future.
But the good new is that David Madani, Canada Economist with Capital Economics in Toronto has been bearish on the Canadian housing market since 2011. He believes Canada is in for a prolonged and painful correction that could see prices fall by as much as 25 percent.
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