The Financial Post reports in its Thursday, April 22, edition that the Bank of Canada is acknowledging that limited housing stock is spurring strong price growth across the country, but expects recent policy efforts to help rebalance the market, according to its latest monetary policy report.
The Post's Bianco Bharti writes that BOC on Wednesday threw its support behind a tighter mortgage stress-test proposal and measures outlined in the budget designed to cool the red-hot housing market, which has been spurred by unique economic conditions borne out of the pandemic.
Governor Tiff Macklem said: "With so many households working and studying at home, we see many people want more space and interest rates have been unusually low, making borrowing more affordable. While the resulting house price increases are rooted in fundamentals, we are seeing signs of extrapolative expectations and speculative behaviour. Given elevated levels of household debt and the risks that households may overstretch in the face of rising housing prices, we welcome the recent proposal by the Superintendent of Financial Institutions to introduce a fixed floor to the minimum qualifying rate for uninsured mortgages."
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