New study: Canadians can’t afford the houses they are living in

A new 18 page report on the Canadian credit and housing boom comes to a sober assessment which we have been warning on for some time: “Canada borrowed its way out of the 2009 Recession by stoking our residential housing market to absurd levels. We cannot afford the houses we are living in.”

This presents serious downside risk to the Canadian economy, our financial system, government budgets and taxpayers. See: The Canadian Housing Market for a good overview and some useful charts. As with every asset market, the best time to sell is before the downcycle hits, when prices are high and people are still complacent. For over-indebted Canadian homeowners, and boomers hoping to downsize within the next 5 years, this report is worth consideration.

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