15 May 2014
Nevertheless, even with 5% annual growth Canadian home prices are rising faster than incomes, and it’s what many economists worry about.
“Today home prices are already 10% overvalued, so the risk of a market bubble is growing,” – Toronto-Dominion Bank economist Diana Petramala said.
Meanwhile, the number of homes that are selling remains below the 10-year average level in more than 60% of Canadian markets. Many realtors, saying Ottawa has done too much for restraining housing market growth, believe the statistic suggests government should stop interfering.
“The recent results show that mortgage rules tightening is working as it should to keep the market activity under control even despite extremely low mortgage rates,” – noted CREA’s chief economist, Gregory Klump.
As you know, during the previous few years the Canadian government has made several moves aimed at restraining the growth of consumer debt level and real estate prices, in order to avoid a market bubble. And many economists agreed with the government.