Current worldwide Google searches pit 6 Canadian cities at the top for the ‘housing bubble’ keyword.
After the federal government implemented new changes to mortgage rules for Canadian home buyers, opting for 25 year maximum mortgage terms down 5 years, people have paying more attention to the domestic housing market. The announcement has renewed the fervor of housing bubble talk in Canada. Bubble rhetoric isn’t anything new, Maclean’s magazine, for instance, has taken the bubble position for almost a year now. Some of the major world affairs publications like Macleans, The Economist, and others, have raised alarm bells as well.
Those who stand to suffer the most or profit the most of course state otherwise. Government and the Central Bank echo a story of stability in the Canadian market, whereas banks scoff at bubble theorists. For their part banks will lose, but lose the lease should a bubble burst. They also can’t help themselves when it comes to making money–which they do by lending out money.
So after reviewing this Google trends graph from March I thought I’d take another look 3 months later to see what the worldwide trends were for ‘housing bubble’ searches. The results are somewhat surprising.
No, it’s not any struggling US city, their time has past, rather, it’s Canadian metro areas rounding out the top SIX of ten.
Vancouver stands at the top, Ottawa surprisingly second, Toronto 3rd, and Calgary 4th.
[See the current trends by clicking here.]
What are we to make of the trends? Well little can be concluded by mere Google trends. In the least the data shows that people in these cities are searching for housing bubble related information–so they’re worried. But is there a correlation between search trends and future housing market trends? Not directly.
But we can safely assume that the housing market climate has shifted in Canada to one of tepid optimism (or downright giddy spending in places like Calgary) to a tone of timidity and concern. Is a bubble on our immediate horizon? Unlikely. For that to take place the interest rate for one has to increase and that may take years. Then there’s the time it takes for everyone to renew under higher interest rates. That’s overly simplistic but the possibility for calamity is at least there….in 2017.