Economist says action may be needed to avoid housing bubble

A Bloomberg economist says that there may be some intervention required by officials in order to calm the housing market.

Canadian consumers are still confident in real estate according to the latest weekly index from Bloomberg and Nanos Research shows an overall rise in consumer confidence with expectation for house prices gaining.

“The bullish sentiment on the value of real estate continues in the Bloomberg Nanos tracking,” said Nanos Research Group Chairman Nik Nanos. “Positive views on the value of interest hit a level not seen since July 2014.

However, this confidence may not be all positive. Bloomberg’s Robert Lawrie commented:
“To the extent that consumer sentiment is signaling a housing bubble, the monetary authorities might need to balance the necessity of extremely low interest rates during the economy’s period of adjustment with policies that tighten the availability of household credit and dampen the domestic demand for housing.”

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