Bank of Canada’s governor Stephen Poloz rejects talk of a housing “bubble”

Wednesday, April 29th, 2015

Jamie Henry

The Bank of Canada’s governor has rejected the idea that there is a housing bubble in parts of the country. Stephen Poloz was appearing before a House of Commons finance committee on Tuesday to defend the central bank’s interest rate cut and give MPs an update on the economy. Mr Poloz last appeared before the committee in November but since then the bank has issued a statement suggesting that housing is overvalued by “between 10 and 30 per cent” and there was the surprise cut in interest rates in January. At the meeting yesterday the BoC chief said that housing is estimated to be around 20 per cent overvalued nationally. Deputy governor Carolyn Wilkins added that with the exception of Toronto and Vancouver signs of a soft landing are now being seen across Canada. Poloz dismissed the suggestion of a housing bubble when it was raised by Democrat MP Guy Caron. The governor said that there was “no excess” in the buying of property and that construction is roughly in line with demand.

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