Categorized | International

Bank of Canada Believes Buyers Should Be Cautious in Housing Market

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Canada’s central bank stated this weekend that the residential real estate markets in certain major cities has hit levels that may be unsustainable. In particular, he was speaking about the condominium sector of the residential real estate market of various cities.

 

The condo market is some cities, specifically Toronto, has reached unbelievable price levels and continues to rise. In Toronto, there has been an enormous surge in the construction of condos. Many fear that supply is going to outpace demand, and cause the market to slide into a massive decline.

 

Toronto’s residential real estate market isn’t the only Canadian market of concern. Bank of Canada also suggested that it is worried about the city of Vancouver, which has become known as Canada’s most expensive real estate market.

 

While the United States has yet to experience a rally of sorts since the housing crash crippled the economy, Canada’s market has seen a bit of a surge in sales and pricing. With the economy almost entirely back on its feet, economists now believe that interest rates need to start being raised to avoid another unsustainable bubble and relentless crash.

 

Canadian economists are thinking more proactively with respect to the current state of the economy. There certainly exists the possibility that the market could once again falter. It is for that reason that economists are being extra careful to avoid any situation similar to what caused the first crash to take place.

 

It is currently unclear as to whether or not the Bank of Canada will take action to cool the condo market down in some of the major cities.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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