Charts: Berkshire vs Tesla, Canadian Housing
Visual research
Fact 1: Over the past 12 months alone, Tesla’s market capitalization grew by more than a full Berkshire Hathaway! Growth’s outperformance is well known and documented, but the speed of this outperformance is jaw-dropping.
Fact 2: Residential investment as a proportion of GDP in Canada skyrocketed during the pandemic and remains at extraordinary levels. The Canadian economy is significantly exposed to a downturn in the housing market.
Fact 3: Housing prices in the US have mainly risen in line with disposable incomes (first chart). In Canada, however, the gap between housing prices and incomes started widening significantly at the turn of the century (second chart). Today the gap is at extreme levels.
Please note that this is provided for general informational purposes. I am not making a buy or sell recommendation. This is not advice. Investing is risky and you could lose a lot of money so consult a professional before making any investing decision.
I'd be interested in seeing real house prices with real mortgages. Are people taking out larger loans in real terms? How much of the discrepenacy between house prices and income is mitigated by equity?