The Financial Post reports in its Thursday edition that Bank of Canada governor Tiff Macklem said he is seeing "worrying" signs in Canada's hot housing market as households take on increasing levels of debt to chase rising prices. The Post's Bianca Bharti writes that the central bank had largely stayed quiet on the housing market until February, when Mr. Macklem said it was showing signs of "excessive exuberance" as national real estate prices jumped 25 per cent from the year before. "Since then, the housing market has continued to run strong across a variety of dimensions; price increases have continued at a pretty high rate," Mr. Macklem told the Post on Wednesday. "If you look at the household indebtedness, you are seeing, on average, the loan-to-value ratios are getting higher, particularly in the uninsured space. That suggests that Canadians are stretching and that is worrying." Some of Canada's biggest banks have been leading the calls for a policy response. Bank of Montreal senior economist Robert Kavcic, in a Tuesday report, said, "Policy-makers need to act immediately, in some form, to address the home price situation before the market is left exposed to more severe consequences down the road."
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