A former executive of Lehman Brothers says that Canada’s housing market is building to a huge bubble surpassing that in the US when its bubble burst.
Jared Dillian told Mauldin Economics that with average national home prices above $500,000, average income of $40,000 and a debt-to-income ratio of 165 per cent, Canadian households are close to “extreme bubble territory”.
Dillian is not the only economist calling for a bubble but financial institutions have stressed that the quality of their mortgage portfolios is generally of higher quality than those in the US when the bubble burst; and that their finances are well placed to cope if there was a significant correction.
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