The report, Canada's Housing Bubble: An Accident Waiting to Happen, which looks at trends in house prices in Calgary, Toronto, Vancouver, Edmonton, Montreal and Ottawa, says that between 1980 and 2010 increases were "outside of a historic comfort level."
The report says that on average, inflation-adjusted house prices in these cities have historically held stable at between $150,000 and $220,000 in today's dollars but current housing prices in all six major cities are now over $300,000 on average.
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The report says Calgary saw housing prices soar by 198 per cent between 1997 and 2007.
Under three different scenarios, the report looks at the possibility of a market correction through housing price deflation, the possibility of a deeper and longer housing crash and the possibility of a rapid and steep decline.
Under the first scenario, Calgary would see an almost 20 per cent decline in prices from $403,000 today to $325,000 in three and a half year's time. If the bubble burst slowly over a period of time, the report says Calgary would experience at least a 30 per cent drop from today's prices to just over $280,000.
And under the worst-case scenario, Calgary would see a 30 per cent plunge in prices.
Read more: http://www.calgaryherald.com/busines...#ixzz0yEqOSiXf