Economists at RBC say that it is receiving many questions from investors about the potential impact for markets such as Vancouver and Toronto in particular, with low interest rates helping to fuel home buying.
The report from George Davis, economist at RBC Dominion Securities, warns: “The housing market serves as the most prominent risk to financial market stability in Canada.”
Davis says that foreign buyers are not the cause of overinflated prices, citing interest rates and higher incomes as greater influences.
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Investors are growing increasingly wary of overinflated home prices in parts of Canada.