Yesterday, Mark Carney (Governor of the Bank of Canada)gave a speech on the direction of the Canadian housing. Bottom line, he concerned that some part of the country have seen prices reaching unsustainable level (e.g. Vancouver). Canadians will only have themselves to blame if they rise to the bait and believe that these prices will continue to grow at their current rate.
Central bankers can say certain things, but to say that the Canadian housing market is in a bubble is not one of the things they can say -- imagine that Canadian suddenly see this as a reason to be wary of leaving money in their bank accounts (it could happen). However, in his speech here
he said two things:
"One cannot totally discount the possibility that some pockets of the Canadian housing market are taking on characteristics of financial asset markets, where expectations can dominate underlying forces of supply and demand,"
“The risk is that expectations become extrapolative, prompting the classic market emotions of greed and fear — greed among speculators and investors — and fear among households that getting a foot on the property ladder is a now-or-never proposition.”
Canada you have been warned. BTW the current "craziness" in Toronto and Vancouver (and to some extent in Montreal) for $1,000 sqf condo offering tells you something about market sentiments.
Central bankers can say certain things, but to say that the Canadian housing market is in a bubble is not one of the things they can say -- imagine that Canadian suddenly see this as a reason to be wary of leaving money in their bank accounts (it could happen). However, in his speech here
he said two things:
"One cannot totally discount the possibility that some pockets of the Canadian housing market are taking on characteristics of financial asset markets, where expectations can dominate underlying forces of supply and demand,"
“The risk is that expectations become extrapolative, prompting the classic market emotions of greed and fear — greed among speculators and investors — and fear among households that getting a foot on the property ladder is a now-or-never proposition.”
Canada you have been warned. BTW the current "craziness" in Toronto and Vancouver (and to some extent in Montreal) for $1,000 sqf condo offering tells you something about market sentiments.