No Canadian home owner will enjoy the message in this Economist article. I have worried (too early evidently) about a house price decline in Canada for a long, long time, but it has been difficult to convince clients that home prices could actually fall.
While such a message may be alarming or disconcerting, it is important to remember that house prices ONLY matter on the day you buy and the day you sell.
If you own a home that still has a mortgage, try to build your equity by paying debt off faster. If you have thought about investing in real estate, a correction would make Canadian house prices more attractive.
Excerpt from article:
Based on the average of the two measures, home prices are overvalued by about 25% or more in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden (see table). Indeed, in the first four of those countries housing looks more overvalued than it was in America at the peak of its bubble.