Friday, February 17, 2012

Canada Poised for Severe Drop -- Bloomberg

Nice correlation. Housing is an economic dead end. Remember that the next time a real estate pumper tries to tell you how great it is that swapping houses spurs people to buy new furniture, new roofs, hire lawyers and movers and, of course, brokers. That's money not heading into an industry that will increase productivity and build the economy.

Canada Housing Poised for ‘Severe’ Drop
“Whenever this ratio goes over 7 percent, it signifies overinvestment in housing and two or three years later, we have a severe correction.” . . . Canada’s ratio of housing investment to GDP has averaged 5.8 percent over the last 50 years and is currently at about 7 percent, based on Statistics Canada figures as of the third quarter of 2011, Athanassakos said. Housing investment includes spending on new homes, renovations and real estate transaction fees.

1 comment:

Jesse Colombo said...


This is Jesse Colombo, writer of I love your blog posts and I enjoy featuring them in my weekly "Bubble News" posts. We share very similar views on the world housing bubble.

I'd love to chat further and share bubble info - feel free to email me at jesse - at -

Nice to meet you,