Housing prices in Canada are not sustainable, and rising much faster relative to how much people are earning or paying for rent, according to released earlier this month.
The results puts Canada, alongside New Zealand, at the top of the list of countries most at risk of a housing bubble, according to the study.
Canada was also the only country to rank near the top in all four bubble indicator categories: House price-rent ratio, house price-income ratio, real house prices, and credit to households as a percentage of the GDP.
Visual Capitalist, , said the fallout from a bubble can 鈥渢hrow a region鈥檚 entire economy into disarray.鈥�
Canada ranked third, behind Portugal and Ireland, for housing prices that outpaced inflation, and fifth, in terms of household debt levels compared to the country鈥檚 economic output.
Federal and provincial governments have already implemented a number of measures in recent years to help cool some of Canada鈥檚 hottest markets, including a stress test and a foreign buyer鈥檚 tax.
But renting, for example, remains difficult for minimum-wage workers in Canada, by the Canadian Centre for Policy Alternative. That study said soaring rent is making 97 per cent of Canadian neighbourhoods unaffordable for workers earning a full-time minimum wage.
Meanwhile, markets like Toronto saw home sales and prices picking up again this month.
Bloomberg economist that efforts to avoid a global economic downturn through looser monetary policy could 鈥渟ow the seeds of the next (housing) crisis.鈥�
With files from BNNBloomberg
