In a report by Tess Kalinowski for the Toronto Star
, incumbent BoC governor Stephen Poloz warned consumers that they should not assume that the current frenzy in the country’s real estate sector is sustainable.
“Prospective homebuyers and their lenders should not extrapolate recent real estate performance into the future when contemplating a transaction,” Poloz said on Thursday (June 9)
The statement accompanied the release of the BoC’s latest financial system review, which echoed other institutions and observers that have already voiced concerns about the long-term health and performance of the housing markets in Vancouver and Toronto.
Household debt continues to climb in the two markets and the risk of a sharp correction in these cities grows by the day, according to the BoC document. In particular, the report pointed at signs of continuous overheating as prices in May grew on a year-over-year basis by 30 per cent in Vancouver and 15 per cent in Toronto.
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The dizzying pace of price growth in Canada’s red-hot housing markets will not continue forever, and buyers should not purchase properties under the notion that they can sell them for even greater sums later on, according to the Bank of Canada’s top official.