Bullwhip29 pointed out this article in the financial post where Bank of Canada governor Stephen Poloz says that the troubles at Home Capital are ‘idiosyncratic‘ and contained:
Poloz said the central bank saw no signs that Home Capital’s deterioration had triggered contagion, according to an interview with the newspaper on the sidelines of the Group of Seven meeting of finance ministers and central bankers in Italy.
“We’d be looking for signs that there are problems with the (financial) system as opposed to preoccupying ourselves with individual institutions,” Poloz said.
He also has some stuff to say about the housing market in general:
Poloz also reiterated in the interview the central bank’s view that recent house price increases were not sustainable, and echoed previous statements that some speculation appeared to be at play in the market. He added that did not mean a major price correction was in store.
“Often, when you have a truly unsustainable housing market, you will see very rapid price increases (and) very rapid credit growth,” Poloz said. “But we don’t see that in the credit side, so I do think a significant amount of this that is fundamental, but layered on top, is a speculative element.”
Read the full article here.
From southseacompany, confidence in the Canadian housing market has reached a record high:
“The experts are getting louder in their warnings that a housing bubble has formed in some parts of Canada, but Canadians don’t seem worried.”
“In fact, confidence in the housing market hit a record high in the latest weekly Bloomberg-Nanos index — even as respondents turned negative on their own personal finances.”
“The survey found 48.5 per cent of Canadians expect house prices to rise in the next six months, the highest level recorded in the survey since 2008. Fewer than 11 per cent expect to see house prices decrease.”
Read the full article over at Huffington Post.
The Financial Post has an article that lays the blame for the enormous Canadian housing bubble on former Bank of Canada Governor Mark Carney:
Carney, perhaps even more than former Fed Chairman Ben Bernanke, was an excellent crisis central banker. Unfortunately, he did not nail the dismount.
After it became clear in 2010 that the developed world had exited the financial crisis, Carney raised rates just a little, to 1 per cent, and then left them there until 2013, when he joined the Bank of England.
Seems like joining the Bank of England should count as nailing the dismount.
If Canada has a hard landing, accompanied by a severe recession or a depression, Carney’s (and to a lesser extent, Poloz’s) mistake will have been unforgivable.
Read the full article over at the financial post.
The NDP is promising to implement a $400 rental grant if elected. This grant would be applicable to all rentals and would have the side effect of pretty much putting an end to rental income tax evasion.
Christy Clark is disturbed by the idea of money going to “wealthy renters”
“That isn’t right,” Clark said. “We shouldn’t be redistributing our tax money to the very rich. We should be making sure that we spend our resources supporting people who are having trouble staying in their homes.”
The NDP also pledges to close a fixed term lease rent loophole that lets some landlords raise rents higher than otherwise allowed.
Read the full article here.
Even outside of ridiculous vancouver, this nation is real estate crazy. In many key metrics Canada has surpassed the US housing bubble at its peak.
As David Rosenberg, the chief economist at Gluskin Sheff told BNN Thursday, “This bubble is on par with what we had in the States back in ’05, ’06, ’07. We have to actually take a look at the situation. The housing market here is in a classic price bubble. If you don’t acknowledge that, you have your head in the sand.”
Read the full article over at Macleans.