The Canadian housing industry is stable and will maintain its equilibrium, according to the Canadian Mortgage Housing Corporation (CMHC), suggesting fears of a housing bust are unfoundedng as the seeming lone voice of reason amidst a sea of dire predictions, according to a blog post written by Don Curren for the Wall Street Journal.
The CMHC report makes the following arguments on why any warning of a bust is premature, notes WSJ blogger Don Curren.
The sales-to-new-listings ratio stands at a steady 40 to 55 per cent. There is neither an uncontrolled construction spree nor a housing shortage, which can lead to either a depression or a sharp price increase.
The number of condominiums being built may be slightly higher than last year, but they are nowhere near the stratospheric figures of past decades. The 955 new condominium units in Toronto that are still unsold are only half of the 2000 peak of 1,800. Ditto with Toronto’s 1,662 units, which are far lower than its 3,317 new units built in the mid-1990s.
Mortgage defaults remain low despite the debt binge of Canadian homeowners. They stand at 0.031 per cent which is slightly lower than the 0.33 per cent of 2012.
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