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Bank of Montreal
Symbol BMO
Shares Issued 646,949,486
Close 2021-03-11 C$ 109.73
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Globe says TD, rivals hear BOC policy may heat housing

2021-03-11 07:46 ET - In the News

See In the News (C-TD) Toronto-Dominion Bank

The Globe and Mail reports in its Thursday edition that the Bank of Canada's low-interest-rate policy risks sending home prices up further, economists say, adding to concerns that the market is overheated and debt levels will be unmanageable when rates do start to rise. The Globe's Rachelle Younglai writes that in its scheduled Wednesday monetary policy announcement, the BOC said housing activity has been "much stronger than expected," while keeping its key interest rate at 0.25 per cent. The BOC is facing a tricky predicament: It needs to keep interest rates down to stimulate an economy sideswiped by COVID-19 without encouraging excessive borrowing and driving home prices even higher. TD economist Sri Thanabalasingan says: "The Bank of Canada is in a challenging position at the moment. Low rates will support the economic recovery, but it does risk encouraging the housing frenzy. The bank may leave it to other policy makers to rein in the housing parade." Since the pandemic started, home prices and sales have been setting new highs for months. Suburbs and semi-rural areas have seen the sharpest price increases, with some seeing property values rising more than 30 per cent over the year.

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