Safe to say home prices in real terms is a good indication of “fair value”
But, as with all credit bubbles, they tend to overshoot.
A 55% drop in Canada is in line with historical norms.
Our interactive guide to the world’s housing markets THE house-price boom that preceded the financial crisis was remarkable for its scope and scale. With few exceptions, there seemed only one way for prices to go: up. Things have been more diverse since then. In The Economist’s latest round-up of residential house prices, property markets are both reflecting and reinforcing the “three-speed” global economy. LINK
You do not want any unnecessary debt when “deflation” hits Canada.
The three drivers of global deflation from 2013-2022 are.
1. Global Credit bubbles bursting (Ponzi Finance)
2. Demographics (population growth has slowed to 1%)
3. The Internet (Which is opening up global markets, and driving down global wages)
Link CPI Canada
If everyone goes well, we should be live within the next two weeks. The timing is extremely important more so since Canada’s massive credit bubble is now bursting.
What the challenge for authorities is deflation arrives into the next global downturn, and the central banks cannot do anything about this.
Deflation should arrive in Europe first, then the US, and Canada will follow.
This is what are leading indicators are telling us.