Quote:
Originally Posted by Slava
This is exactly why the BoC has such an incredibly difficult job. The past 6-7 years have seen prices sky rocket in two markets. So, naturally, pundits (largely Americans in the finance realm) see this as a Canadian home price bubble. The central bank should raise rates to quell this. Makes sense.
The problem is everywhere on the prairies would’ve been absolutely crushed. We had no growth from about 2015 until 2021, or growth that was far from concerning.
What’s a central banker to do? You can’t raise rates to deal with two white-hot markets. But you let those run wild and run the risk of a bubble popping instead of slowly deflating. A very unenviable decision.
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Perhaps there is a reason we have two outliers in one country?
Does anyone really think that Toronto & Vancouver are actually driving more 'real' demand in real estate than Paris & London? Or is everything inflated above and beyond for other reasons besides normal demand?