When Finance Minister Jim Flaherty was asked about the Canadian housing market on Wednesday, he stated that he has not seen a clear sign of bubble in Canada, and he will not be taking any measure to cool the market. Meanwhile, Flaherty and Bank of Canada Governor Mark Carney have been paying close attention to Vancouver housing prices, and are warning Canadians not to take too much debt in case of an interest rate rise.
On the other hand, IMF report points out that the private debt level is concerning in Canada, and it suggests the Canadian government to try to prevent households from taking too much debt.
Flaherty believes that the level of housing demand in Canada is not surprising given the low interest rate, and the housing market has been softening due to the tighter mortgage rules introduced earlier this year.
He does admit though, that Vancouver has seen some unusual demands, mostly because of purchases made by Asian real estate investors. A survey by Canada’s leading real estate broker shows that the average price of detached one- and two-story homes in Vancouver has risen by about 17% in the past year to more than $1-million, and this is about three times the national average.
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