"Canada's banks sound the housing bubble alarm, finally"
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After years of pumping money into the country’s frothiest housing markets, Canada’s big banks are suddenly—and alarmingly—nervous about the debt-fuelled monster they’ve helped to create. In the span of a few days this week and last, several big-bank CEOs and chief economists let loose a flurry of warnings about surging home prices in Vancouver and Toronto, where it now costs an average of $1.5 million and $1.3 million, respectively, to buy a detached house. “We’re a little concerned about housing prices in the Greater Vancouver area and Toronto,” Brian Porter, CEO of Scotiabank, told Bloomberg TV shortly after the bank’s latest financial results were released.
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As a result, he added, Scotiabank “took our foot off the gas” when it came to selling new mortgages over the past six months. A few days later, Sherry Cooper, the chief economist at Dominion Lending Centres and the former chief economist at the Bank of Montreal, told Business News Network she was “very worried” about skyrocketing home prices in Vancouver and Toronto because “these things generally don’t end well.”
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Really tough situation, as lenders don't want to miss out on these markets, but are cautious at the same time. It's difficult to curb this situation, as proposed solutions would be implemented cross-Canada, even in markets seeing a decline (ie. Calgary).
Interesting to see some of the names that are listing their properties in these markets - former Finance Minister Joe Oliver, and Scotia CEO Brian Porter.
http://www.canadianbusiness.com/econ...form=hootsuite