Canadian banks want the government to take measures to halt the latest surge in home prices.
Several bank CEOs and economists are urging the government of Canada to slow the runaway housing bubble where prices are advancing at a 15 percent annual rate after inflation.
Will the government make bold moves to halt housing mania?
The banks are urging the government to act, but they do not specify exactly what measures they would like to see. The banks are conflicted in several ways.
The housing mortgage business, and related activity, is crucial to the banks’ profits.
Within the banks, mortgages and HELOCs are the largest share of total loans and management does not want to see a slowing of the growth rate of mortgage loans, especially given the recent slump in credit cards and business loans.
Population Growth Gets Too Much Credit for Housing Bubble howestreet.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from howestreet.com Daily Mail and Mail on Sunday newspapers.
Value Versus Growth howestreet.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from howestreet.com Daily Mail and Mail on Sunday newspapers.
February 26, 2021 | The Federal Reserve is Both Arsonist and Firefighter
Hilliard MacBeth Author of When the Bubble Bursts: Surviving the Canadian Real Estate Crash
The stance of the Federal Reserve chair, Jerome Powell, as confirmed publicly this week, is for continued support for the economy, as 10 million jobs are still missing.
A year ago the Fed lit a fire under prices for assets like stocks with its expansion of credit and extremely low interest rates.
At some point the Fed will start to worry about inflation and try to put out that fire.
Will the Fed keep pouring gasoline on the fire?