The real estate market in this city is either the best thing since sliced bread or a bomb waiting to go off under everyone's retirement fund. There have been increasingly shrill warning calls from the financial industry about real estate in Vancouver and Toronto for a while now. Earlier this week the country's big banks rang the bells again. From the Globe and Mail:

The market should inevitably cool in 2012 as housing supply begins to outstrip demand, and consumer debt hovers at historic high levels, the head of Canadian Imperial Bank of Commerce told an investor conference on Tuesday.

CIBC chief executive officer Gerry McCaughey told analysts and investors in Toronto that the housing market is “leaning heavily into an area that might be peaking,” and instead will begin to soften.

BMO and the Royal Bank also expressed concerns about 2012. The predicament is that a huge glut of supply, especially condo towers, is coming up this year, and banks are increasingly nervous about whether the market exists to buy up all those units. Add in the mystery of how much of Toronto's condos are being bought by international investors—and the mystery of exactly how much value a 300 square foot condo will keep outside of a bubble—and the banks are worried about how exposed they are.

Blog photo by bennylin0724 via Flickr.