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Our Market Will Not Crash Because There is No Bubble

Finally an article in the Financial Post that speaks a bit of truth! It explains that some buyers are waiting on the sidelines for this so-called housing "bubble" to burst.. but what if there is no bubble at all? What if all this "bubble" talk is simply  the media sensationalizing our real estate "market".


The article explains that for a "crash" to occur there needs to be a spark or a catalyst in our market place. Two event that could cause sellers to drop their prices and "have to sell" would be a substantial rise in interest rates or job loss - neither which are happening in Canada.


So what do we have instead? Sellers are holding their prices steady. Some sellers are taking their homes off the market and waiting for a better time to sell.


According to Don Lawby, chief executive of the Century 21 Canada, “The economy continues to be okay, people have jobs, interest rates are low,” said Mr. Lawby. “Historically, anytime when prices dropped it was tied to high unemployment and interest rates. It’s not the case today, people are not forced to sell, they are staying with their price.”


So what does it all mean?


Benjamin Tal, deputy chief economist with CIBC World Markets says "stagnation is a good word for what will happen, it’s what we saw in the market from 1992 to 1997,”


The key word in the above sentence is stagnation, not crash!



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