"Here in Canada, you know it's not a bubble because it's not burst," Caranci said. "The air is being let out of it slowly, whereas in the U.S., you actually heard the pop.Let's compare some numbers: apparently a one fifth or 20% decline is an audible bursting of a bubble. But in Canada, where housing starts are down anywhere between 10% - 16%, this is called a slow bleeding of air, and good for the long-term health of the housing market.
Actual single starts in urban areas were 16.3 per cent lower than a year earlier, while actual urban multiple starts were down 5.3 per cent.So what will all those high earning trades people go on to do if the number of projects is down? Will layoffs signal an emotional reaction in our markets? Will there even be layoffs?
Another expert, Carl Gomez, an economist with TD Economics in Toronto had this to say in May 2005:
"Canada's red-hot housing market is on a solid foundation because there is very little evidence of speculative activity,"Haven't seen much speculating going in in Victoria, nope, not here, everyone wants to live here, it's a great place to invest because everyone from out east will pay a premium to be here.
Funny how Carl changed his tune, just two short months later:
TD Bank Financial Group says Vancouver and Victoria are the two Canadian cities at greatest risk of a potential housing bubble. The report by TD economist Carol Gomez says speculative buyers and investors are driving up prices in beyond justifiable levels in the two B.C. cities.
And that was 2005. Did it get better between then and now?