Q&A - US and Canadian housing markets

This Q&A discusses the current state of the US and Canada’s residential property market a decade on from the Global Financial Crisis

8th May 2018

Continue to the other two articles in this edition of Global Outlook.....

Outlook remains positive despite risks of trade war


Louis Wright explores why, despite increased financial market volatility and downside risks from heightened global trade tensions, the global economy continues to improve.

Click here to read more


Swedish house price trends


Swedish residential price growth turned negative in the second half of 2017. Dr Jarek Morawski looks at the implications of this on the residential market as well as wider consequences for the Swedish economy.

Click here to read more


We’re coming up to 10 years since the US housing market crash and the credit crunch. What’s the current state of the US housing market?


The US housing market reached an important milestone recently: based on the Case-Shiller 20-city composite index, the US housing market finally recouped the losses it suffered during the market crash.  In nominal terms, house prices in key US bellwether markets moved past their pre-crisis peak in January of this year.  From the peak of the market in April 2006 to the bottom in March 2012, US house prices fell by around a third.  Since then, house prices have risen by just over 50%.  In inflation-adjusted terms, though, house prices remain about 20% below their pre-crisis peak.

Has this been a broad based recovery, or have different areas recovered at different speeds?


The recovery in the US housing market has not been enjoyed evenly across the country.  Indeed, there is a clear regional clustering of areas that have recovered as much or more than they lost during the downturn, and areas that still see house prices below their pre-crisis levels.  Tech-centered US cities – San Francisco, Seattle, Denver, Austin – and adjacent markets have done well since the crisis, as have a variety of Midwestern cities.  Cities in New England, Florida, and South Western US have generally not recovered to their pre-crisis level. 

Digging a bit deeper, it turns out that the markets that saw the largest run-up in prices during the mid-2000s house price boom experienced the slowest recoveries following the market crash.  Data on the 100 largest US metros from the U.S. Federal Housing Finance Agency show a high negative correlation (-0.54) between house price increases between 2000 and pre-crisis peak, and the recovery to date from the bottom of the market. Still, in 63 of the 100 sample metros house prices currently sit above their pre-crisis peak, pulling the overall US housing market above the pre-crisis peak.

How do US housing dynamics compare with those in Canada?


The US famously suffered steep declines in house prices leading up to and during the Great Financial Crisis, but Canada emerged from the same period unscathed.  Whereas US house prices fell by about a third peak to trough during the crisis, Canadian house prices rose by 39% over the same period.  Much of this has to do with household leverage.  US household debt peaked at the end of 2007 at 97.9% of GDP, compared with only 78.7% of GDP in Canada.  As of September 2017, US household debt had fallen to 78.5% of GDP, representing a 19 percentage point decline from the pre-crisis peak.  In Canada, on the other hand, household debt ballooned to 100.4% of GDP by September 2017, a higher household leverage ratio than the US has ever seen.  But while Canadian household leverage is high, it has remained constant since mid-2016.  And since mid-2017, overall Canadian house prices have not grown.  This pause in Canadian household leverage growth alongside specific policy measures designed to cool some of Canada’s priciest housing markets, such as Toronto and Vancouver, are starting to weigh on Canadian residential prices.

View all Grosvenor contacts


Use of this Grosvenor Fund Management Limited (“GFM”) section of the grosvenor.com website (the “GFM Website”) is subject to the following terms and legal notices (“Conditions”).  You are being asked to agree to these Conditions because:  (a) you are accessing the GFM Website for the first time or (b) you are accessing the GFM Website from a different section of the grosvenor.com website. 

The information in the GFM Website was prepared by GFM only for, and is directed only at, the limited categories of persons described under “LEGAL NOTICES” below.  The information in this GFM Website is not intended for the use of and should not be relied on by any other person.

GFM is registered in England, with Company Number 04056191 and its registered office at 70 Grosvenor Street, London W1K 3JP.

This GFM Website contains general information about GFM and related entities and is intended for informational purposes only. The information contained on this GFM Website is not an offer to sell or a solicitation of an offer to purchase interests in any fund managed by GFM or a related entity, nor  is it intended to provide, and should not be relied on for, investment, tax, legal or financial advice.  Investors should seek applicable professional advice for their particular situation.  The information contained herein is a summary only, is not complete, and does not include certain material information, including potential conflicts of interest and risks associated with an investment with GFM and its related entities.

No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained in the enclosed materials, including hyperlinks or references to other sites, by GFM or its related entities, and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions, to the fullest extent permissible by applicable law.  Users are responsible for evaluating the adequacy, accuracy, reliability, merchantability, non-infringement, and/or completeness of any information or the content available on this GFM Website or fitness for any particular purpose with respect to this GFM Website or any of its content.  The estimates, strategies, and views expressed herein are based upon past or current market conditions and/or data and information provided by unaffiliated third parties (which has not been independently verified) and is subject to change without notice. An investment with GFM is speculative and contains significant risks, including the risk of loss of some or all of an investment, and is intended only for sophisticated investors who meet certain eligibility criteria.  Such investments are not deposits or obligations of, or guaranteed or endorsed by, any bank and are not insured or guaranteed by any government or any other agency.


Information displayed on this GFM Website may contain material that is interpreted as a financial promotion for purposes of the Financial Services and Markets Act 2000 of the United Kingdom (the “FSMA”).  GFM is not an authorised person for purposes of the FSMA, and accordingly, the communication of information on this GFM Website is provided only for and is directed only at persons in the UK reasonably believed to be of a kind to whom such promotions may be communicated by an unauthorised person pursuant to an exemption under the FSMA (Financial Promotion) Order 2005 (the “FPO”).  Such persons include: (a) persons having professional experience in matters relating to investments (“Investment Professionals”) and (b) high net worth bodies corporate, partnerships, unincorporated associations, trusts, etc. falling within Article 49 of the FPO (“High Net Worth Businesses”). High Net Worth Businesses include: (i) a corporation which has called-up share capital or net assets of at least £5 million or is a member of a group in which includes a company with called-up share capital or net assets of at least £5 million (but where the corporation has more than 20 shareholders or it is a subsidiary of a company with more than 20 shareholders, the £5 million share capital / net assets requirement is reduced to £500,000); (ii) a partnership or unincorporated association with net assets of at least £5 million and (iii) a trustee of a trust which has had gross assets (i.e. total assets held before deduction of any liabilities) of at least £10 million at any time within the year preceding the promotion.  Any investment opportunities mentioned in this GFM Website are available only to such persons, and persons of any other description in the UK may not rely on the information in it.  Most of the protections provided by the UK regulatory system, and compensation under the UK Financial Services Compensation Scheme, will not be available.

GFM is established in the United Kingdom, which is a member state of the European Economic Area (the “EEA”).  Accordingly, this GFM Website is issued by GFM to the categories of persons described in the paragraph above that are both resident in and accessing this GFM Website from any member state of the EEA in reliance on its rights under the Directive on Electronic Commerce (2000/31/EC).  The member states of the EEA are:  Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom.

If you are not resident in an EEA member state or you are viewing this GFM Website in a country that is not an EEA member state, information displayed on this GFM Website contains material that may be interpreted by the relevant authorities in the country from which you are viewing the GFM Website as a financial promotion or an offer to purchase securities. Accordingly, the information on this GFM Website is only intended to be viewed by persons who fall outside the scope of any law that seeks to regulate financial promotions in your country of residence or in the country in which the GFM Website is being viewed. Examples of such persons may be governmental agencies, persons sufficiently experienced in investment business to appreciate the risks associated with investment services promoted on this GFM Website, large corporations and trusts and high net worth individuals. These examples are not country specific, may not be relevant to the country in which the GFM Website is being viewed and are provided for illustration purposes only. If you are uncertain about your position under the laws of your country of residence or the country in which the GFM Website is being viewed then you should consult your legal adviser.

Notice to Persons in the United States:

With respect to U.S. investors, investments in funds managed by GFM or a related entity are restricted to institutional investors who meet certain eligibility requirements.  Any potential investor should satisfy him or herself that an investment in any product of GFM or a related entity is permissible under the rules and regulations of his or her domicile.  This GFM Website is not directed to any person in any jurisdiction where the publication or availability of this GFM Website is or would be prohibited.


The related entities of GFM include:

  • In the United Kingdom, Grosvenor Investment Management Limited, which is registered in England (Company Number 02774291) with its registered office at 70 Grosvenor Street, London W1K 3JP and which is authorised and regulated by the Financial Conduct Authority.
  • In the United States, Grosvenor Fund Management Inc., which is registered as an investment adviser with the U.S. Securities and Exchange Commission.
  • In Japan, Grosvenor Fund Management Japan Limited provides financial services and products under its Kanto Local Finance Bureau (Kinsyo) License No 1956 issued by The Financial Services Agency, the Japanese Government and real estate investment advice as authorised under its Discretionary Real Estate Investment Advisory Business, License No. Sogo 63 issued by the Ministry of Land, Infrastructure, Transport and Tourism. It is also authorised to transact real estate business under its Real Estate Transaction Business License No. Tokyo Governor (2) 87514 issued by the Tokyo Metropolitan Government.  

By clicking “I ACCEPT” below, you consent to the above Conditions and, in particular, you confirm that either:

(a)     you are resident in and accessing this GFM Website from one of the United Kingdom or another member state of the EEA and you qualify as an exempt category of person under the FPO (such as an Investment Professional or High Net Worth Business, as described under “LEGAL NOTICES” above); or

(b)    you fall outside the scope of any law that seeks to regulate financial promotions both in the country of your residence and in the country in which you are viewing this GFM Website, and therefore by accessing this GFM Website you will not contravene or cause Grosvenor to contravene any such law.