Hi Edgy,

That article did not mention that the housing affordability index in Canada is the highest is has been since 1990 (as reported by RBC in March) when the last real estate bubble peaked. The reason for this is that housing prices have rises approximately 10% per annum (as per FP article) while real wages have risen at a fraction of that rate. Sooner or later that delta has to contract somewhat and the only factors maintaining it have been relatively decent job growth (until recently) and low interest rates. The banks even introduced the 40 year amortization (a mistake IMO) to help prolong the growth in the real estate market.

The fact that prices are not rising as quickly and the number of sellers has increased are signs that we have seen the top. These markets are either moving up or down and the fact that we are witnessing a slowdown leads me to believe it will remain this way for a while and we will see price declines, however not to the same extent we are witnessing south of the border.

There are many small manufactures in southern Ontario that supply much of their product to the US and they can only delay the eventual layoffs that will result from a drop in sales. Yes, some other parts of the country like Saskatchewan are witnessing growth in the real estate market, but when compared to the much larger markets, the general trend appears to be lower.