Bubble or not? (How Canada’s real estate boom has defied the global financial crisis)

Citation

Urstadt, B. (2011), "Bubble or not? (How Canada’s real estate boom has defied the global financial crisis)", Strategic Direction, Vol. 27 No. 1. https://doi.org/10.1108/sd.2011.05627aad.006

Bubble or not? (How Canada’s real estate boom has defied the global financial crisis)

Article Type: Abstracts From: Strategic Direction, Volume 27, Issue 1

Urstadt B.Bloomberg Businessweek, July 2010, Start page: 64, No. of pages: 4

Discusses Canada’s continuing real estate boom where house prices continue to rise rapidly in defiance of the global financial crisis and recession that has devastated the housing markets of other economies, such as that of the USA. Focuses on the real estate market of Vancouver, where the boom is taking place with the most vigor. Explains that the real estate market in Vancouver has not emerged entirely unscathed by the financial crisis, but prices rebounded after the initial impact of the crisis, and the average home in the city is now approximately 10 percent above the pre-crash peak. Traces this success to that of the Canadian banking system, which was voted the soundest by the World Economic Forum’s most recent Global Competitiveness Report, where the country’s healthy banking system is due in part to the fact that it went through a reform after a crisis in the early 1990s and, although Canadian banks are among the largest in the world, they are much more tightly regulated and in ways that keep loan quality high and increase banks’ incentives to hold those loans. Notes that some financial experts are less enthusiastic than others about the real estate boom and see Canada heading for a Canadian version of the US real estate bubble since banks have relaxed lending standards, there is high unemployment, and the country may have reached a point of unsustainability in the housing market. Points to the factors that have spurred recent home sales.Article type: ViewpointISSN: 0007-7136Reference: 39AR582

Keywords: Banks, Canada, Economic depression, Finance, Real estate, Recession