Wednesday morning’s Bank of Canada’s interest rate announcement warns that household vulnerabilities have risen.
As we learn from a financial expert, that warning is aimed directly at Vancouver and Toronto.
CKNW Business Analyst Robert Levy says that the warning – in layman’s terms – means the red hot markets in Toronto and Vancouver are now at a higher risk of some kind of correction.
“Basically, the markets of Toronto and Vancouver are more vulnerable to downsize prices, because in terms of the housing market across Canada, these are the two cities that are really out in front, and they are out in front on their own.”
Levy says the two markets are skewing national housing numbers, which outside of Toronto and Vancouver are either flat or in decline.
“It really is a regional story, and certainly from the bank’s perspective as well – that is why they are not making interest rate policy respective with what is going on in the housing market, because it varies so much across the country.”
He says the Bank of Canada is not saying one way or the other if any pricing correction will be a minor or major one.