Toronto Housing Boom Unsustainable, Bank of Canada Says

The Bank of Canada warns that Toronto homebuyers should not expect the fast pace and increasing prices of the housing market to continue. According to the head of Bank of Canada, Stephen Poloz, potential homebuyers and their lenders should not expect recent real estate performance trends to extend in the future when considering a transaction. Bank of Canada's concern for Toronto's housing market is among many banks and housing experts that also expressed their concern and gave warnings about the sustainability of Canada's two hottest housing markets in Vancouver and Toronto. The Bank of Canada warned consumers to not get caught up in the hyped market conditions that are seen across the Greater Toronto Area where homebuyers are bidding tens and sometimes hundreds of thousands of dollars, over list prices due to the lack of supply. Demand continues to exceed the supply of housing specifically detached and semi-detached homes. The warning from Bank of Canada came in yesterday, a day after the Finance Minister Bill Morneau stated that Ottawa was conducting an in-depth analysis of the country's real estate markets to find out whether more safeguards are required to ensure that Canadians can still afford homes in the scenario of an interest rate increase or other economic changes takes place. According to the central bank's report, there is a growing risk of sharp correction in Toronto and Vancouver. The bank says many households are battling other financial stresses including accumulating debt. Reference: The Toronto Star https://www.thestar.com/…/bank-of-canada-warns-of-sharp-cor…