Economist predicts long, painful housing correction in Canada

Canada's existing home sales fell 3.2% in October compared to September, according to the Canadian Real Estate Association. No big deal right? After all housing sales were brisk through the summer and bigger picture-wise Canada's housing market has been on a near-constant upward trajectory since 1997, hitting all-time highs on a regular basis.
While bearish commentary from most Canadian economists who has been scarce, other institutions, and media outlets many of them outside the country, have been sounding a warning call for some time. Goldman Sachs, International Monetary, The Economist and the Financial Times have argued the Canadian market is overcooked and ripe for a correction.
David Madani, Canada Economist with Capital Economics in Toronto has been bearish on the Canadian housing market since 2011. He believes Canada is in for a prolonged and painful correction that could see prices fall by as much as 25 percent.
That would be comparable to the last time the market crumbled in 1989/1990, which dragged on for the better part of a decade.(more)

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