How long will the housing boom last?

Garth Turner has some unsettling news for Canadians who've tied their financial future to their homes – every real estate bubble in history has burst, and there's no reason to think it will be different this time.

Mr. Turner's new book, Greater Fool, The Troubled Future of Real Estate, argues that Canadians have been buying homes at inflated prices by taking advantage of expensive mortgages that last 40 years and signing up for incentive plans that allow them to forego the traditional down payment. As a sub-prime-mortgage crisis unfolds in the United States, with more than 400,000 families losing their homes in the past year and a million more said to be on the brink, should they smugly assume they are insulated because of high commodity prices and a strengthening dollar?

“When the average family can no longer afford the average home, how can so many people be deluded into believing a boom will last forever?” he asks. “How could we put so much money into something we might never be able to sell, except to a greater fool?”

(Garth Turner/Globe and Mail)