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Globe says CIBC, rivals hear low rates dividing country

2021-03-23 08:57 ET - In the News

See In the News (C-CM) Canadian Imperial Bank of Commerce (CIBC)

The Globe and Mail reports in its Tuesday edition that the Bank of Canada can either support a pandemic-plagued economy with easy money or it can put a lid on runaway speculation by hiking interest rates, but it cannot do both. The Globe's Ian McGugan writes that booming prices are dividing the country into housing haves and have-nots. Mr. McGugan says any attempt to cool off real estate markets risks an explosive backlash from existing homeowners, mortgage lenders and the real estate industry. Mr. McGugan says raising rates now to cool off the housing frenzy would be throttling an economy already beset with virus-related challenges. He notes, however, that governments have many other levers to pull if they want to target home prices. Ottawa, for instance, could raise down-payment requirements, further tighten standards for getting a mortgage and start taxing capital gains on the sale of primary residences. It could also promote policies to encourage more home-building and increased density in city centres. The Globe says those moves, however, fall outside of the BOC's control. They require politicians willing to act. More than that, The Globe says they require voters to decide what it is they really want.

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