Canada Housing Bubble and Mortgage Time Bomb

The Canadian housing market is undergoing a 20% price correction driven by extreme unaffordability and a surge in supply. A looming 'payment shock' faces 60% of mortgage holders set to renew at higher rates in 2025-2026.

Key Takeaways

• 1.Canadian home prices have declined approximately 20% from their Q1 2022 peak due to extreme unaffordability and rising supply.
• 2.A 'mortgage payment shock' is imminent as 60% of Canadian mortgages, mostly 5-year fixed, are set to renew in 2025 or 2026 at higher rates.
• 3.Canadian housing supply is expanding rapidly, with housing starts 24% higher than 2019 levels, significantly outpacing US growth of 8%.

Table of Contents

• Not our neighbor's housing market
• It was a bubble
• Unaffordable
• Build build build
• Mortgage payment "shock"
• Inner London
• What about the US?

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