In its latest financial system review, the central bank said Thursday the twin factors have increased the downside risk to economic growth as rising rates meant to counter inflation increase the chance of households having to divert consumption towards debt repayments.
Households on average have seen their net worth increase by about $230,000 over the first two years of the pandemic, largely from rising home prices but also from the rising stock market and other gains. The bank said that the strong growth in house prices during the pandemic has boosted the economy in the short-term, but in the midterm it could weigh on economic growth.
The potentially rising costs come as house prices were up 24 per cent in April compared with a year earlier, and up 53 per cent relative to April 2020.
Stop the fear mongering.
Thanks to this incompetent government and corrupt media.
Should probably make mortgage payments bigger then
This is how they will make sure we own nothing.
So raising interest rates to make it harder for those in debt to get out of it is the answer? 🙄
The govt profited from higher priced real estate. Higher values means higher land transfer taxes collected, higher property tax collected, higher capital gains on sale profits collected.
This is who you elected
Firesale on homes coming soon
Alternate headline. Bank of Canada allows dangerous borrowing habits and makes there nut off it. Now shocked when the bubble pops!
The issue is people borrowing with current house value and then price drop to the point bank think e.x. your house value decreased 30%, now you have to pay bank the differences otherwise they won’t give you the loan.
No way, with the high cost of living for a developed country claiming to be better than the USA will it ever get better. It only gets worse
Yup and it has been for a couple decades now and still getting ignored by most.
Because every moron thinks they need a 4,000 square foot house, 5 TVs, and two monster trucks....
So, stop raising interest rate!
There's a downwards spiral coming, it's just a matter of when. People are borrowing against the current value of their homes. If that bubble bursts, they'll still be left with the debt, but they'll now have a house value that if sold might not even cover that debt.
No mention of Government debt?
Don’t know whether to say No Shit Sherlock or You don’t say, but either of those statements apply. It doesn’t take a team of financial experts to see the problems… hell half the population has been saying this before the BOC said it… get your shit together BOC
Is the BoC admitting that near zero % interest rates incentivizes the rich and the upper middle class to take on more debt than they should?
So they keep raising rates? Doesn't make sense. It's not helping, it's harming. And only they keep getting richer
Private sector debt is the real limit to interest rate hikes. If we want going to restrict excess demand flowing into real estate, then government needs to establish better credit controls. But nobody in power wants to take the blame for deflating homeowners' equity.
Gee, do ya think?
Dnt save your 💰 in the Canadian banking system , your saved dollars are worthless🏧🚮 sitting in those accounts ... BUY DOGECOIN 1 Doge is 1 Doge world 🌎 wide ... Takes smart money to make ______...
Lol ..after messing everything in housing market now they found this as risk
Not billions sent to tax havens wage stagnation
You don't say.
Yah think?
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