Adam Peterson writes the Canadian housing bubble is headed for a “slow-motion” crash:
My gravest concern is that Canada is fast approaching a 5:1 home-price-to-income ratio, a benchmark achieved by the U.S. at the peak in 2006. Since the correction, the U.S. ratio now hovers at approximately 3:1.
To compound the problem, household debt in Canada has breached 150 per cent of income and continues in the wrong direction; households are not cushioned against a blow.
Australian household debt is also hovering around 150% of disposable income.
While the price-to-income ratio varies between 4 and more than 6 depending on whether you use national averages or median data.
Read more at Canadian housing bubble looks ripe for popping | Toronto Star.
The Socialist Myth of Economic Bubbles
http://iakal.wordpress.com/2014/06/21/the-socialist-myth-of-economic-bubbles/