October’s house price results released recently by Teranet revealed that Canadian house values rose marginally over the month (+0.1%) to a new record high, with prices also 30% above their April 2009 trough:
In real terms, Canadian house prices also hit a new peak, with prices also 20% above their April 2009 trough:
Moreover, prices have begun to gain momentum, driven by its biggest market, Toronto, and a strong recovery in Vancouver:
A report released yesterday by ratings agency Fitch claimed that Canadian house prices are 21% overvalued, although it believes that prices will experience a “soft landing” and will either flatten out or slightly decrease over the next five years. Fitch also believes that the Canadian economy will be exposed as the housing market unwinds, since many households have over extended themselves.
The OECD seems to agree, labeling Canada’s housing market as amongst the world’s frothiest and warning of a possible “disorderly correction” in prices given the record debt burden among Canadian families.
