-- Current home prices in Canada can’t be justified if medium-term interest rates stay elevated, a former Bank of Canada official said, underscoring the risk to one of the country’s most important sectors.The Secret Plot Against the Head of the World Health Organization
The benchmark price of a home in Canada was C$757,600 in August, up 40% in five years — with most parts of Ontario and Quebec seeing much larger price increases. Canadian homeowners, unlike their US counterparts, don’t have the option of locking in rates for 30 years. Most borrowers have rates that are fixed for five years or fewer, or they have floating-rate mortgages that rise and fall with the Bank of Canada rate.
Beaudry, who left the central bank in July, said his former colleagues will remain worried about core measures of inflation until they ease closer to the 2% target. “If they don’t come down, that really brings a danger that maybe there is a point where the Bank of Canada will need to tighten more,” he said.BOE’s Mann Says UK Interest Rates May Remain Permanently Higher