The Globe and Mail reported today that the Bank of Canada appears confident that the hot national housing market will slow down before a bubble forms. The housing market has been on the central bank and the Finance Minister’s radar over the past few months as the market just hit a record number of sales last month, as they are wary that a bubble may be forming. Jim Flaherty thought the situation was getting so serious he cautioned that the government could look at adding further mortgage market regulations to the mortgage market to try and slow down people taking on too much low interest debt and to slow down the housing market.
Today the Bank of Canada governor, Mark Carney said, “Following a period of vigorous growth, housing investment is projected to slow through 2010 as pent-up demand subsides and affordability declines”.
In the same statement the bank said they expect the Canadian economy to grow faster than expected from the 2nd quarter of this year through early 2011, and increased its forecast for the US. So it seems like the recession is behind us, and with Obama’s recent announcement that he wants to increase banking regulations so that the US can’t get into a situation again where taxpayers are held ransom by a bank that is “too big to fail”, let’s hope we don’t get into this type of a situation again.
Time will tell.
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