Canadian Housing: Noting For Posterity

I'm posting the following chart from BCA Research not for the purposes of persuasion, but rather, for posterity.

Canada Housing

If you have a sense of the historical economic similarity between Canada and the United States, understand the computation and significance of price:rent and price:income as housing valuation metrics, and yet still don't feel even a flutter of anxiety about the future of the Canadian housing market, and more importantly, the downstream economic and societal implications of a reversion to the mean - then you're far beyond the power of my rhetoric to change your mind1.

As I write this, in late 2013, Deutsche Bank joins a growing list of spectators whose ranks include The Economist, Goldman-Sachs, Robert Shiller, the IMF, Nouriel Roubini, and Paul Krugman - all of whom have expressed incredulity and/or concern in one form or another about the stratospheric valuations in the Canadian housing market.

My opinion, irrelevant and disinterested2 though it may be, is very straightforward, and has been unchanged for several years now: this will end badly, for the leveraged and unleveraged, alike. Just ask anyone from the Republic of Ireland. Or look a little closer to home - below the 49th Parallel.

Feel free to disagree with me3. Most Canadians do, at least as a default position. But if you do disagree, surely it's at least partially concerning to witness all this opposing consensus among weighty, if not necessarily clairvoyant, external parties?

  1. Or, quite possibly, you're subject to the phenomenon, originally noted by Upton Sinclair, that it is difficult to get a man to understand something, when his salary depends on his not understanding it. ↩

  2. I really mean this - I'm disinterested (but not uninterested clearly, as all of this is deeply fascinating to me - in a train-wreck sort of way). I have no real stake in whether or not there's a massive housing bubble in Canada, other than the stake of preferring not to live in a country captured by the fallacious belief that trading real estate is the preeminent way to generate wealth. ↩

  3. Keep in mind: it's possible to simultaneously {own property | need to buy it soon} and {find the status quo very concerning}. ↩