CANADIAN HOUSING MARKET WILL COOL, NOT CRASH [INFOGRAPHIC]

We’re excited to launch RateHub’s first ever, but certainly not last, infographic.

With crash predictions dominating the Canadian media headlines lately we decided it was time to step in and do our own research. We set out to compare Canada’s housing market today against the US’s in 2007 and outline both the market similarities as well as the fundamental differences that shield Canada from the magnitude of the housing crash that occurred in the American market.

[hint: click on the image to enlarge]

Is Canada headed for a US-style subprime mortgage crisis?
mortgage rates infographic by ratehub.ca

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Alyssa Furtado

Founder
Alyssa studied business and math at Queen’s University, before going into management consulting for two years. She left the corporate world in 2009, launched RateHub.ca on January 1, 2010 and hasn’t looked back since. Passionate about building amazing products that help Canadians make smart financial decisions, Alyssa uses her expertise in SEO to drive people to the site. She empowers the team to do their best work, which is a large part of what makes the company culture so great. Family, friends, travelling and kiting are important to her, and she is happiest when all four are combined.

Latest posts by Alyssa Furtado (see all)

  • Yeaaah… I thoroughly enjoyed reading through that. Good job guys… I’ll be sharing.

  • Thanks so much Chris. Glad you enjoyed.

  • John Crespi says:

    The only thing I would worry about is the growing debt-to-income ratio. It’s a personal choice to owe more than you make.

    BTW, it’s interesting that all the publications at the top of the infographic are left-leaning newspapers. How about some conservative viewpoints?

  • [...] this infographic from ratehub.ca, a ‘mortgage blog’, 27 Mar 2012. The link was kindly forwarded to us by frequent contributor ‘Zerodown’, who adds: [...]

  • [...] In: Made by Me I had a blast working with RateHub on this infographic. Show some love and spread the infographic to your fellow home buying friends and shine some light to skeptics who’s lost hope on the [...]

  • Jason Friesen says:

    fantastic, i’m sure my referral network will like it!

  • Eric Putnam says:

    Well done job on the infographic ..as a former mortgage lender and broker for many years I do not believe we are headed for the housing “melt down” in Canada as experienced by many Americans for several reasons, some of which you have otulined. I have shared with others already Thanks for posting!

  • Uh? says:

    Minimum downpayment 5%? So how about those very popular cashback mortgages offered by pretty much every bank out there. 7% cashback ??

    http://www.rbcroyalbank.com/mortgages/cash-back-mortgage.html

    they give you back your downpayment plus an extra 2% !!! Mandatory 5% downpayment ? Bogus !! Subprime baby, and can’t be refuted.

    Cute graph by the way

  • rob_ says:

    The graphic conveniently ignores:
    - Housing bubbles in Ireland, Spain, Japan, and other places that had different conditions than the US.
    - The 1931 housing bubble and collapse which occurred in Vancouver and perhaps other Canadian cities.

    You don’t need to have US-style conditions to have a bubble burst.

  • rob_ says:

    oops I meant 1981 not 1931.

  • Like the way it is presented.
    Do you think all the factors will add up to cause a crash?

  • shayan says:

    Great Stuff, Ratehub’s rocking it!

  • [...] this infographic from ratehub.ca, a ‘mortgage blog’, 27 Mar 2012. The link was kindly forwarded to us by frequent contributor ‘Zerodown’, who adds: [...]

  • sjw says:

    I think your colours/labels on the low interest rate box are flipped.

  • concerned says:

    There are a few confusing statements within the infographic that made me pause for a minute or two, like “Factors shield market from a bubble burst, such as long-term low interest rates.” Is that really the case? One of the ingredients listed for a crash is ultra-low interest rates… And the statistic concerning Canadian’s debt-to-income ratio reading 153% for 2011 seems like enough reason for people to stop purchasing housing as an investment, and that will surely drive prices into the ground. I understand that these stats are meant to represent Canada as a whole, but is everyone really expecting Vancouver’s housing market to slowly deflate like a balloon? Or is it set to burst?

    The idea of an infographic to explain the housing market is great though…

  • Evergreen says:

    The average canadian household income cannot support the current home price. The question is when will the market correct? So be prepared than be misled!

  • Luis says:

    This is wishful thinking. As another comentator said, US-like conditions are not the only triggers of a crash. Otherwise, there would not have been crashes anywhere. The conclusion (no crash, only cooling) is definitely not supported by the data presented. The data only says that the FINANCIAL markets may not get hit the same way by a potential housing crash.

  • [...] argument in infographic form that housing prices will cold though not pile-up in [...]

  • Richard says:

    Funny.. as noted by my Boss who is a Harvard economic professional. First the MSM will deny there’s an issue with Real Estate. Then they will say it’s not a national issue but a local issue. Then they will say it will be a soft landing not a crash (that’s where were at now). Then they will say it’s temporary and will rebound fast. Then they will point fingers and blame the government policies when were all on fire…. This has been repeated in this fashion for every major issue that affects us all. We are sheep and it serves us right for buying this over and over and over :)

  • Steve says:

    Excellent Infographic.

    I have seen many Canadians borrowing in Canada to invest in US property. I wonder how much of the “growing Canadian Debt” is invested overseas in positive cash flowing investment properties?

  • Joe says:

    U forgot to mention rates have never been this low, when rates rise housing prices will fall.