The struggling Canadian canary

Back in March, I wrote about the new Fragile Five, which were five highly leveraged developed market economies that were undergoing property booms. The five countries are Australia, Canada, New Zealand, Norway, and Sweden.

As a reminder of how insane property prices are in Vancouver, which is one of the epicenters of the real estate boom, I highlighted this little gem that was listed for about USD 1 million.

Here is the same beauty from the back.

For some perspective. This chart depicts the debt bubble in Canada and Australia. If you are worried about runaway debt in China, then you should be equally concerned about the property bubble in the other Fragile Five countries.

So far, this has been a "this will not end well" investment story with no obvious bearish trigger. Now, there seems to be signs of a turning point in the Canadian economy.

The full post can be found at our new site here.




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