Bloomberg reports that according to the latest weekly survey by Nanos Research Group, a record share of Canadians expect home prices will continue hitting new highs, an exuberance that adds to concern the housing market is entering a speculative bubble.
Six in 10 Canadians believe the value of real estate in their neighborhood will increase over the next six months. It’s the first time such readings have surpassed 60% since polling began in 2008, underscoring how the rally in home prices is beginning to feed expectations of future high returns.
The concern is these so-called extrapolative expectations will attract the wrong sort of demand -- from speculators or investors fearing they will miss out -- that will hyper-inflate the market, exacerbate in affordability for young or low-income families, add to rising mortgage debt and amplify the risks of a destabilizing market crash.
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