I live in Québec, Canada. I've owned a duplex, home and condo. Currently, own the duplex and condo while ex has the house. I gotta disagree with you because I've seen huge housing price growth here...not just from my personal experience...its something that's frequently discussed among a few friends that work in the real estate markets (selling homes and condos) here in Québec. Yet, nothing like in comparison to Toronto and Vancouver. In fact, I've never heard of any housing slumps here. I can't speak for the Chinese population but my neighborhood does have two new Chinese families and one new Japanese family...two of which admit its just a vacation home for them.
Over how long of period? 20 years? Since when 99% of the population were renting? And even with that, it's only just with certain neighbourhood in Montreal. If you go outside of Montreal and look at the rest of Québec, you will see there is no housing price growth.
Condo purchased in 2001...value has 3x. Home purchased in 2005...value has 2.5x Duplex purchased in 2007...value has 2x I live outside of Montreal. In fact, not only has the value gone up...new home divisions are being built. New schools being built because the current school systems can not absorb the big growth. Three different private schools built new schools (2x - 3x bigger) to meet the demands. All the new schools built in growing home divisions. Further, if it were not for the new home divisions...the malls would have died as they predicted back in 2005. Oddly, the only slump I see was from companies like Target and FutureShop that have closed shop here although they seemed very busy or popular. The economy in Quebec seems (no facts) to be growing too because I see more new restaurants (trendy places for those that can spend a lot of money) near or in the new growing areas. I do sense (no fact but just a feeling) that the system is "strained" because it can not absorb the growth or having difficulty in meeting the demands. Oddly, I don't see new apartments being built except in a few areas. Thus, most of the growth is in homes and condos...not apartments. I do know a few rental areas where the rents have been "lowered" or stayed the same for several years and to me that's something not being discussed by the housing markets.
If hypothetically the bubble does pop, will Canada handle the financial crisis in a similar manner to the USA GFC? Will they sharply cut interest rates. What will happen when Canada's credit rating gets downgraded?
Where is this place outside of Montreal? West Island? Laval? Blainville? One reason: Chinese or immigration settlements.
There is NO bubble in Canada, just some growth spurts fueled by Chinese buying. Canada's interest rate is already at the lowest; it can't cut any lower. Any lower, you will be PAYING to deposit money in the banks. You already are but you will be paying more.
Is it possible for interest rates to be lower? They are pretty much as low as they can go. Negative rates perhaps? lol. It's not mechanically possible for it to pop, because that is not a free market economy. It is a command economy. Which means the government will step in for sure in front of any crisis. It will take on debt. Hand out free money to people. Kick the can down the road. Throw future generations under the bus. Whatever it takes to put a halt on any 'hard landing'. Timing good shorts is hard enough. Betting on financial crisis of planned economies is an even harder game at that. This goes for people betting on a financial crisis in a particular rather communist by name asian nation that is often a hot topic of hedgie shorts. Heck, even the "financial crisis" in the capitalism poster child of the world in '08, turned into a command economy with government stepping in with bailouts. Capitalism only exists when times are good. When times are bad, you turn into a communist state. It's like freedom. When times are good, we are free people and democratic. At times of war, you get thrown into Japanese concentration camps for being ethnically Japanese by blood relations, freedom, rights and liberty be damned. One way to judge how willing any particular country is to allowing free market forces to run it's course, is to judge the degree in which they are bleeding hearts. How much 'pain' are they going to allow people to endure? How much skin do policy makers have in the game? Take refugee policies for example. When a country allows refugees to flood in en-mass in spite of some being sworn enemies, the bleeding heart meter is registering pretty high. Such a country will not allow a financial crisis and a recession to take place without taking action. Particularly when decision makers own a lot of property too.
Basically China has to be in a recession for housing prices in Toronto to dip. From my understanding it's a bunch of Asians with too much money fueling this growth
Let us not forget another partner in this crime RLB estimates that there were more cranes in use for apartment construction in Sydney, Melbourne and Brisbane (454) than there were in New York, Boston, Chicago, San Francisco, Los Angeles, Toronto and Calgary combined (419). Go Australia! Read more at https://www.businessinsider.com.au/...-of-north-america-2016-10#bj0m0Puv7yuXKhLC.99 Construction is going crazy over here, Building approvals are surging in March, to 5 year highs, truly insane (the ref article is from Oct 2016)
Construction boom is good for increasing housing supply, which does put a downward pressure on prices in general. But it depends on a lot of factors like material and labor cost. How much does it take to build? If the economy is at a level where this cost of production is high, the chances are the prices remain high, as nobody builds and sells at a loss.