Ben Bernanke says Canada has tools in place to cope with a hot market.

The former chairman of the Federal Reserve says that Canada has some tools to cope with the hot housing market, something that was not the case in the US housing crash.
Ben Bernanke, while talking at an event organized by the Globe and Mail, said that “
Canada
has made some progress” in areas such as requiring higher down payments and other mortgage lending restrictions.

He noted that the largest risk is not of a price correction but the potential impact on the wider financial system, which he said must be protected.

As he reflected on his time at the Fed during the financial crisis, he said that the housing market’s impact on the economy was due to a regulatory system with “a lot of gaps in it.”

A client note from the National Bank, economists Marc Pinsonneault and Krishen Rangasamy said there are “now two housing markets in Canada” with data from the Teranet-National Bank HPI showing stagnation and decline in prices in many markets.  The three hot markets remain Toronto, Vancouver and Hamilton. 

Info provided by the "Canadian Real Estate Wealth"  

 

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