Money
| Toronto Sun
Canadian households hold more debt than American families did before the U.S. housing bubble burst, which has led the government to tighten mortgage lending rules four times in four years.
And data released on Wednesday showed the Canadian economy shrank in August, an unexpected downturn that bodes ill for housing even as the U.S. economy shows signs of recovering.
The debate in Canada is whether the market will come down with a thud or make a relatively soft landing, as most mainstream economists predict. They see a 10 to 15 percent correction in prices and a slowing in housing starts to 180,000 a year by 2014, down sharply from the 220,000 range today. In that scenario, GDP growth would be cut by 1 to 1.5 percentage points, according to CIBC World Markets.
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