Canada’s housing market is overheating.
Don’t worry, there’s no risk of a crash yet and further action by the federal government is expect to cool things down.
This according to Bank of America Merrill Lynch economist Emanuella Enenajor.
And, perhaps more importantly, she noted that “it’s different this time” because the Federal Reserve is in the midst of gradually raising interest rates.
“Economists and investors have become numb to signs of housing excess, as the sector has defied gravity for years,” Ms. Enenajor said.
“However, as the Fed gradually exits its accommodative policy, medium-term rates in Canada could also rise.”
This, she warned, heightens the threat of a correction in Canada’s housing market.
Read the full article over at the Globe and Mail.