topped 20 per cent. Again, this attests to the massive principal payments that have gone along with the surge in these past several years in household indebtedness.Let’s assess the extreme degree of the bubble that exists in Canada, both on the consumer balance sheet and in the overextended residential real estate market:
4. It now takes 11 years of median income in Canada to afford a single-family home. That compares to eight years in the U.S. today, and is yet another in the long line of two-SD events in this country. 7. As for housing as an asset on Canadian household balance sheets, try this on on for size: 55 per cent of total household net worth is in residential real estate, versus 30 per cent in the U.S. now and 39 per cent at the 2006-07 bubble peak. Yet again, a two-SD event.Here is the truth as opposed to the myth we constantly hear about “supply shortages” in Canadian housing .Article content
As a result, productivity in Canada has been flat or down in eight of the past nine quarters and is near a three-year low. That has pushed the Bank of Canada to steadily reduce its estimate of potential real GDP growth to a puny 1.75 per cent for 2022. That’s it? What we do have is population growth of 1.6 per cent. In other words, potential growth would be negative given the trend in productivity. What an economy.
Trudeau: I DID THAT.
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