The Canada-US housing devide
The bursting of the housing bubble and rapid onset of recessionary conditions in the U.S. homebuilding market have raised concerns that a similar situation could develop in Canada.
Although income growth in both countries has been comparable over the past five years, household debt in the U.S. has increased much more (+70%) than it has in Canada (+40%). This rapid increase has pushed the debt-to-income ratio in the U.S. to 135%, well above Canada's 125% level.
Although income growth in both countries has been comparable over the past five years, household debt in the U.S. has increased much more (+70%) than it has in Canada (+40%). This rapid increase has pushed the debt-to-income ratio in the U.S. to 135%, well above Canada's 125% level.
Comments
- No 30 year mortgages in Canada - 10 year is about the longest you can get (w/a balloon payment - expectation is you refinance)
- Mortgage interest is not tax deductible
If I understand correctly, I'd think both of these would moderate the bubbliness of the market. That comment excludes the oil boom areas of course. I think the housing cost increases there have everything to do with energy and not much to do with what is going on in the USA