Quote:
Originally Posted by peter12
So now the house-flipping will heat up even more in Vancouver and Toronto, and middle-class owners will take on even more debt. I don't see the BoC's line of reasoning on this cut.
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Well the house angle is just one consideration. The other factors include things like GDP (which shows us as in a recession or teetering on the brink). The other thing this does as alluded to in one of the three threads on the topic now, is reduce the currency. By devaluing this, exporters ramp up production and it increases demand for them. This includes oil and gas. For a commodity like oil this has an additional benefit where they sell in USD and pay expenses in CAD.
So yeah, the housing angle is potentially dangerous, but the other benefits are still part of the decision.