The Financial Post reports in its Wednesday edition that ground zero of the national housing crunch has shifted to Central Canada's biggest cities, and excess demand appears to be coming from investors, not households, according to the Bank of Canada's biannual review of the financial system.
The Globe's Kevin Carmichael writes that the housing mania that has gripped the country for more than a decade originated in Vancouver, where the combination of ultralow interest rates, international money and low supply combined to ignite a real-estate boom that captured global attention, and eventually morphed into an affordability crisis that turned housing into an important political issue.
However, demand and supply in British Columbia's main urban centre have been roughly balanced since the end of 2019, according to the BOC's House Price Exuberance Indicator, which combines various strands of housing data to assess whether prices have become "extrapolative," the BOC's word for demand explained by an expectation that prices will keep rising, not market fundamentals such as population growth and the rate of housing starts.
Now, authorities in Ontario and Quebec should be most worried about a housing bust.
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