Assessing the Impact of a Housing Market Correction on Canada’s Homeowners
This study finds that young homeowners would be hardest hit by a correction in Canada’s housing market. CCPA Senior Economist David Macdonald assesses the impact of a housing market correction on the net worth of Canadian families and finds a 20% decline in real estate prices would leave 169,000 families under 40 underwater, with more debts than assets. Canadian families are taking on disconcerting levels of debt to finance their real estate dreams. The average debt-to-income ratio of thirtysomethings has almost doubled since 1999, hitting a new high of 4:1, the highest of any age group.
The study concludes with an evaluation of programs that were used in the U.S. after their real estate crisis and makes recommendations for programs that could be useful in Canada in the event of a real estate correction here.
Read the news release here
