Canada Real Estate: The Voodoo of “Booming” and “Fraying”

The Globe and Mail says,

Canadian home prices hit record in May

I’ve heard of “deadly” real-estate markets, but #Toronto always seems to take things to a whole new level …

Canadian home prices got a boost in May, hitting a record high, according to the Teranet National Bank house price index.

Prices were up 0.8 per cent in May from April.

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Huffington Post says,

Canada’s Real Estate Market Is ‘Fraying’: Report

Canada’s real estate market may look healthy, but it’s showing signs of fraying in certain regions and prices could fall by 25 per cent in the long term.

Canada’s real estate market may look healthy, but it’s showing signs of fraying in certain regions and prices could fall by 25 per cent in the long term.

So says a report by Capital Economics, a consulting firm that is holding fast to an ominous prediction it made for home prices in 2012 and 2013.

Economist David Madani says that the market is “surviving for the time being on rapidly rising prices” in overvalued and thinly-traded markets, but regional sales indicate that it’s unraveling.

Housing activity and prices are falling in Halifax, while a slowdown is also being observed in markets such as Winnipeg and Victoria.

Of particular concern to Capital Economics is Montreal’s housing market, which now faces the risk of a price decline, the report says.

Meanwhile, home prices in Toronto and Vancouver, the most overvalued markets, are holding up for now, though that partly reflects fewer new property listings.