The two biggest concerns on the bank’s radar are also intertwined. It said the growth in mortgage lending in Toronto and Vancouver has largely fuelled an increase in Canada’s overall household indebtedness since the bank’s last review six months ago.
“Highly indebted households have less flexibility to deal with sudden changes in their income,” said the bank.
“As the number of these households grows, it is more likely that adverse economic shocks to households would significantly affect the economy and the financial system.”
The document was released as concerns about the Canadian real estate market — domestically and from abroad — continue to pile up.
Read the full article over at the Financial Post.