Dean Baker: Canada's Housing Bubble

Housing bubble a danger: expert
One of the first economists to predict the U.S. mortgage crisis warned Wednesday that Canada's housing sector could be headed for a sharp correction. Dean Baker of the Washington-based Centre for Economic and Policy Research said he sees no reason why average home prices in Canada should be about 50 per cent higher than in the U.S. Baker said if interest rates rise by two per cent, Canadians could see house prices collapse by 25 to 30 per cent.