The Bank of Canada: Housing-market crash not in the cards
Article by Emad Fadel, The Globe and Mail, December 11, 2014
“The Bank of Canada does not foresee the sort of sharp rise in joblessness or mortgage rates that would trigger a major housing market correction, Governor Stephen Poloz said on Thursday.
Speaking to reporters in New York a day after the central bank said it estimates the Canadian housing market could be overvalued by 10 to 30 per cent, Mr. Poloz said the probability of such a big drop in prices is low.
“The risk comes when some catalyst sets off the vulnerability,” he said. “In this case it would be, let’s say, a rise in unemployment, a significant one, where it makes people have difficulty paying for their mortgage, or a rapid rise in mortgage rates, neither of which we’re expecting.”
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