Economist predicts long, painful housing correction

News form BNN about Canadian Housing Market

      Canada’s existing home sales fell 3.2% in October compared to September, according to the Canadian Real Estate Association. No big deal right? After all housing sales were brisk through the summer and bigger picture-wise Canada’s housing market has been on a near-constant upward trajectory since 1997, hitting all-time highs on a regular basis.

Canadian housing market is overcooked and ripe for a correction.

“Housing prices don’t, can’t and won’t go up forever.”

So what makes Canadian housing price so high right now? Overbuilding is a major cause. Since more and more people realized that investment in housing will bring them relatively huge amount of income, Canadian housing market expanded rapidly. In the future, however the huge oversupply will eventually drag down the price.