Canadian Real Estate Prices Are Growing Multiples of Other G7 Housing Bubbles

Canadians know the real estate market is growing fast but how unusually fast it’s moving may not be clear. Data from US Federal Reserve researchers might help with that. The numbers show Canadian home prices increased at a rate at least 50% faster than any other G7 country in Q4 2021. The issue isn’t just one or two quarters though, but persistent froth that has accumulated. Home prices in Canada have more than doubled since 2005, rising at least twice as fast as any other G7 country. Some of which have even acknowledged they’re in a real estate bubble.

Canadian Real Estate Grew 1.5x Faster Than Any Other G7 In Q4

Canadian home prices rose much faster than any other G7 country in the last quarter of 2021. Home prices increased 5.7% in Q4 2021, about 1.5x the rate in the UK (3.8%), the second fastest G7 for the quarter. The US (3.5%) is in a distant third, even with substantial growth. It was a huge quarter, topping off a huge year.

Canadian Real Estate Prices Grew 25% In 2021

Home prices surged last year in most advanced economies but none grew like Canada. Annual home price growth reached 25.1% in 2021, about 1.4x the growth rate of the US (17.9%), the second fastest G7. It was a sharp drop off that gets sharper with third place, Germany (12.4%). Growth might seem tiny in contrast to Canada, but it’s a boiling point issue for Germans. Some policymakers have even begun to push for the nationalization of rental stock.

Canadian Home Prices Grew 219% Since 2005, 3x Any Other G7

As mentioned earlier, the issue isn’t one or four quarters of high growth for Canada. The country persistently outperforms other G7 countries, creating a mind blowing gap. Since 2005, Canadian home prices increased 219% — more than double Germany (93%) and over 3x the UK (76%). The US (67%) is considered frothy, but with less than a third of the growth of Canada, it might seem like a deal. The gap really has to be seen to be appreciated.

Similar errors in monetary policy across many countries have sent home prices soaring. This is a point Canada’s banks have been hammering on, arguing this shows it’s a monetary issue. The big difference is countries like the US acknowledge they have a housing bubble. Meanwhile, Canada is slurring its words and explaining it only had a little to drink but thinks it’s still OK to drive home. 

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