Sherry Cooper, who was previously chief economist at RBC, said in a note Wednesday that Canada’s housing market has “peaked” and warned that house prices in the hot markets of Vancouver and Toronto are starting to run out of steam.
Cooper is not predicting a crash but her words chime with those of TD Bank and other analysts that are starting to see the end of the boom time.
Part of the reason for the slowdown, Cooper said, is that most Canadians are already homeowners. “With 70 percent of Canadian households already owning their own homes and housing affordability declining with the bottoming in mortgage rates and the rise in house prices, lending activity will inevitably slow," she added.
The Bank of Canada held interest rates at 0.5 per cent Wednesday and Cooper does not expect any further cuts. “Canadian interest rates have bottomed," she said.
"Most particularly, mortgage rates have bottomed. The growth in mortgage lending has likely peaked, or will very soon."
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The chief economist of Dominion Lending Centres has called on the new prime minister to take swift action on housing.