Almost every major bank has released some kind of housing market economics report over the past several weeks that either pronounces the Canadian market to be in bubble territory or suggests that we may soon be there.
And now Re/Max comes up with a gem: Housing market to soar in 2010. I won't link to their advertorial here because I want to save readers from the sick taste of bile it inspires. But I will say this: I think they may be right. And by they, I mean both the banks and Re/Max. We are in a bubble and I believe housing prices will continue to rise in 2010.
Yesterday the federal government announced that almost all of it's stimulus funds are committed. What this really means is the money will be flowing next year. Whenever governments rush to spend money, contractors jack prices. Next year could be a great year, one of the best on record even, for Canada's bloated construction sector.
Government spending, and the subsequent consumer spending it will trigger, will be inflationary. Prices will rise.
I don't believe house prices will fall until interest rates rise by at least 1%. When that happens, look out.