Is Canada experiencing a housing bubble?



Abstract

Housing bubble caused by the abnormal increase in real estate prices. US have faced many of the housing bubble in the past times. Canada also has faced two housing bubbles in the history but only in two cities of Vancouver and Toronto. There are a lot of factors that cause housing bubble to create and burst also like Mortgage Rates, Income, Migration Rate, Population and other factors. In comparison of US and Canadian Market, US market is very different in terms of policies regarding mortgages and defaults. In Canada the laws are nor flexible as in united estates. Although, there is some massive increase in real estate prices in Canada but it cannot be concluded as the housing bubble

Abstract3

Introduction4

Discussion5

Over view of real state industry7

Defining the US Real Estate Industry8

United States real estate policies:12

Defining the Canadian real estate market:13

Key Factors and their Effects on Housing Starts21

Canada VS United States in Sight:25

Conclusion:27

References30

Is Canada experiencing a housing bubble?

Introduction

Property has always been an important part of human life. In history, there have many wars have been fought for this at micro as well as at the macro level of human society. After the beginning industrialization era property rates tends to increase up till now. Housing bubble is an economic term related to the real state sector where prices tend to increase abnormally in high volume in the real sector. After getting a certain peak point in the prices, it declines towards the bottom level.

Housing has major effects on social stability and economic development in the developing countries of the world. Consequently, ease properly functioning housing finance markets. This increase the supply and affordability of housing individual is one of the significant issues for the policy maker of this industry. Globalization has significantly involved in the globally integration service sectors including manufacturing, and the other sub sectors like real estate industry have been an active participant in this internationalization rush. The international financial issues are mainly blamed on the United States real estate finance market, is now alarming to further setback the establishment of housing finance markets in the developing part of the world as policy-makers come to grips with the lessons from the crisis of United States to avoid a recurrence in their own markets, once established. Policy maker of the other part the world can take the guild lines from the United States financial crises. That can help them to avoid housing bubble in those developing countries of the other part of the world.

There is two dominant part of this. First to avoid the bad loans; second, if the government is trying to make bad loans for political reasons, that needs a stable explicit socio-economic policy to avoid the allied risks. The strict lending policies can make sure that loans are absolute in a linear manner. All of these standards must be in line with economic and social policies that their government has chosen to follow. That lending standards can be established by the mean of licensing standards ...