BUSINESS Huffington post
08/10/2019 18:49 EDT | Updated 08/10/2019 21:32 EDT
Soaring House Prices Could Return As Interest Rates Head To Zero: BMO
"When you’re looking at a market that becomes driven by wealth ... there isn’t necessarily a limit to house prices."
By Daniel Tencer
Soaring House Prices Could Return As Interest Rates Head To Zero:
The recent slowdown in Canada’s hottest housing markets is turning a corner and a potential new price boom is threatening to frustrate would-be buyers’ hopes.
The real risk to Canada’s housing market today is not a crash, but a return to nosebleed levels of price growth thanks in part to falling interest rates, said Doug Porter, chief economist at Bank of Montreal.
Policymakers will have to “be ready to wield some tough measures” if they want to prevent housing costs from becoming even more unaffordable, Porter told HuffPost Canada ― though he said he would “leave it to policymakers” to decide what those should be.
The latest data from the Toronto and Vancouver real estate boards shows the markets shaking off foreign buyers’ taxes and the mortgage stress test. Home sales jumped 24 per cent in both cities in July, compared to a year earlier.
Much of that has to do with more affordable mortgages. The collapse in interest rates on government debt around the world in recent months has pushed down the rates Canadian lenders can offer.
Home sales jumped 24% in Vancouver in July...is this for real? Seems to contradict everything I am hearing. Can anyone confirm?
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