The Bank of Canada is again warning Canadians about high levels of household debt and problems in the housing market.
In its latest report on Canada’s financial system, the central bank said that Eurozone instability poses the biggest challenge internationally, and in Canada, a slowing housing market with too many condo units available could eventually destabilize our economy.
The bank’s report says, “House prices are high relative to income… and the total number of housing units under construction remains significantly above its historical average relative to the population”.
Last week the Organization for Economic Co-operation and Development (OECD) reported Canada’s housing market as one of the most overvalued in advanced economies. Toronto’s condominium market is particularly vulnerable.
The large number of unsold high-rise units under construction or in the pre-construction phase poses a risk to the larger economy if they are not sold in the next year or two.
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