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The same is happening in many other countries (housing in my country is similarly overpriced related to income), and I have the same problem - I'm renting, and housing is getting more expensive every year (as well as rent). I believe prices are cyclical and we should expect a "down" period, but when it will happen is always the question :) . Most economists believe cycles are almost inevitable, but "On average, upturns last more than downturns" and "the amplitude of upturns is also larger" Some googling found for example this paper, which includes Canada: http://www.imf.org/external/pubs/ft/wp/2011/wp11231.pdf It warns of "slow nominal price adjustment" during downturns, which is my experience as well (prices trail reality by 1-2 years during a downturn). So, you have to understand your reality, if you need a house in the next few years, they're not going to get any cheaper. If, OTOH, you can wait out the cycle and save money, you can probably make a good deal later. That is, unfortunately, not a choice for most of us. |