Last fall, The Economist published a piece that put Canada on a list, with a few other smaller countries, of those eligible for a significant correction of real estate prices. Hasn’t quite happened yet. The country gains a quarter million immigrants a year and is set to become even more of a petro state in the future. Both things keep traditional ideas and indicators of growth cooking along. A number of large resource extraction projects are also on the books and these will likely bring in the cash, too. Thing is, if real estate prices remain jacked up it makes things tough for the working poor. It’s a mixed blessing for the beleagured middle classes, too. Home equity makes a lot of them feel richer and smarter than they really are. A real estate wipe-out would hurt, but we can already see there’s pain in this long boom, it just depends who you are. For the suburban poor, high prices for real estate mean the rents are jacked higher than wages and for the middle class homes remain overpriced. Hard to say what will happen. We heard on the radio today that, according to the governor of the Bank of Canada, the bad economy in the United States costs Canada as much as $30bn a year in lost export trade. Wow! Will we crash the way the Americans have, just a bit later, or will we skate through this era of debt and disaster to whatever era arrives afterward?
Economist bubble piece
Bank of Canada comments Huffington Post Canada
Bubble case studies: Ireland & Canada Automatic Earth, 2010
Photo credit: Marceltheshell via Wikimedia Commons