With these criterion Canada’s market is especially vulnerable. A large bubble now looks set to burst. Home sales in March were 15% down on a year earlier. Buyers are in short supply. A recent poll showed that only 15% of Canadians are likely to buy a home in the next two years, down from 27% last year—the steepest decline in the 20-year history of the survey. After a big boom, the housing bust will be a wrenching affair.
By contrast, the recovery in the United States, where house prices are up by 9.3%, is based on solid foundations. Previous falls in prices have made homes cheap by historical standards. The recovery has been driven by investors rather than owner-occupiers, but interest on the part of homeowners is increasing. Housing starts are rising sharply.
In the crisis-stricken euro area the Spanish freefall will continue, judging by still- elevated valuations. Housing markets are depressed throughout southern Europe, notably in Italy. But the agony is no longer confined to the periphery of the euro zone.
Home prices are falling fast in the Netherlands and they are also sagging in France. High valuations in both countries point to more misery ahead.
The big exception in the euro zone remains Germany, which avoided the great housing boom before the financial crisis. Property prices continue to rise but modestly.
Source: The Economist
By contrast, the recovery in the United States, where house prices are up by 9.3%, is based on solid foundations. Previous falls in prices have made homes cheap by historical standards. The recovery has been driven by investors rather than owner-occupiers, but interest on the part of homeowners is increasing. Housing starts are rising sharply.
In the crisis-stricken euro area the Spanish freefall will continue, judging by still- elevated valuations. Housing markets are depressed throughout southern Europe, notably in Italy. But the agony is no longer confined to the periphery of the euro zone.
Home prices are falling fast in the Netherlands and they are also sagging in France. High valuations in both countries point to more misery ahead.
The big exception in the euro zone remains Germany, which avoided the great housing boom before the financial crisis. Property prices continue to rise but modestly.
Source: The Economist
