In these two sets of numbers lie Canada's housing bubble.

There's an article in today's Vancouver Sun by Barbara Yaffe.

Titled: The high cost of home ownership: Canadian homeowners carried nearly $1.2 trillion in mortgage debt last year, the article shares a stunning statistic:

The Canadian Association of Accredited Mortgage Professionals estimates, homeowners in this country — of whom 60 per cent carry mortgages — owed nearly $1.2 trillion in mortgage debt last year, up from $664 billion in 2008. In other words, national mortgage debt has nearly doubled in just four years.

Combine that with the fact that CMHC has gone from $100 Billion in insured mortgages in 2006 to almost $600 Billion today and you know where Canadians got the money to bid the price of real estate to astronomical levels.

Debt fuelled our bubble, plain and simple.

Throw in emergency level interest rates to facilitate the low monthly payments on massive mortgage amounts and you get a real sense of why the bubble has continued for so long.

But make no mistake.  These are not real estate prices which reflect intrinsic value.  The real estate bubble is born of excess credit.  Massive, excess credit.

This is a scenario that has been repeated over and over the past 500 years.

• Tipper and See-Saw Time (1621)
• Tulip mania (top 1637)
• South Sea Company (1720)
• Mississippi Company (1720)
• Railway Mania (1840s)
• Encilhamento ("Mounting") (1886–1892)
• Florida speculative building bubble (1926)
• Roaring Twenties stock-market bubble (c. 1922–1929)
• Poseidon bubble (1970)
• Japanese asset price bubble (1980s)
  • 1997 Asian Financial Crisis (1997)
• The Dot-com bubble (1995–2000)

A boom caused by excess credit will always bust. Ours will be no different.

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