|Source: BCA Research's blog (added the black vertical line)|
Here's more on Australia. According to a July 2013 Common Wealth of Australia report, household debt trends appeared to be under control. But a 2012 BIS report showed that Australia's debt service ratio was at a level that caused a banking crisis in the US UK, Italy, Finland and South Korea. At that time, Australia's household debt-service ratio was actually higher than the US's DSR was before its banking system collapsed. But Australia's business sector debt service ratio was at historic lows.
|Source: BCA Research's blog|
Here is Canada's household debt-to-income ratio versus the US's since 1990. This a crazy divergence.
|Source: BCA Research (via @Econompic) (black vertical line added)|
So, in my opinion, get ready for a house price correction in Canada. Here is why condos are overvalued. Housing market corrections in Canada and Australia will probably lead to recessions. I bet they will be fueled by Fed tapering/tightening and China's deleveraging.