Written by Breck Hapner
Editor’s note: Welcome to the Haven State of the Canadian Housing Market series. Every month, we will share an update explaining details and projections related to Canada’s real estate sector to keep you informed.
Canada may be facing a precarious real estate bubble exacerbated by high debt levels. This could potentially lead to an unraveling of the Canadian housing market, particularly in the Toronto region. According to the UBS Global Real Estate Bubble Index, published October 12th, 2022, Toronto was ranked as one of the most inflated real estate markets in the world.
A bubble occurs when the housing prices in a particular area rise rapidly, generating demand that is fraught with elevated risks due to imbalances in economic markets. As mortgage rates and inflation increase, concerns also grow that personal incomes may not sustain overall housing affordability.