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> Which is fascinating to consider that the Bank of Canada, et al, have let this happen for so long and are only reacting now... In Canada this is because the

> Which is fascinating to consider that the Bank of Canada, et al, have let this happen for so long and are only reacting now... In Canada this is because the real estate bubbles were confined to Vancouver and Toronto. Raising interest rates to cool down real estate in those two cities would have been bad for the rest of the country.

dmix 9y ago
The property bubbles are limited (primarily) to those two major cities, yes. That's a good point. But the high household debt issue is country wide. Property ownership in those two cities also isn't limited to being a resident of those cities either. A significant amount of properties are rented out and the landlord can live outside of the cities, so the effects of a drop in prices will be widely felt. Combined with the fact those two cities and surrounding areas represent a significant percentage of the total population. The US housing crisis was itself limited to a group of areas in the country in varying degrees as well, for example Florida got hit way harder than most places. The group was just far larger given the country's population is 10x the size of Canada. And Bank of Canada has started to add mortgage restrictions this year country-wide so they too see it as something that needs to be addressed nationally.
NathanCH 9y ago
That's a bit misleading, by no means was/is the bubble limited to these cities. More like B.C and Ontario.
- randomdata 9y ago
  That may be an exaggeration as well. As a resident of Southern Ontario, but not Toronto, the CREA data shows that home prices in my area were stagnant, to slight decline, for most of the last decade. It has only been in the last year that any meaningful price appreciation has been observed. And I attribute the recent price appreciation to an improving economy and near record low unemployment (currently 2.9%).
  - crescentfresh 9y ago
    Also as a resident of Southern Ontario, but not Toronto, I concur.
  - dblohm7 9y ago
    And regardless of the scope of the bubble, even if we conceded that it is all of BC and ON, the fact remains that the Bank of Canada has to act in the best interests (ha) of the country as a whole.

dmix 9y ago

The property bubbles are limited (primarily) to those two major cities, yes. That's a good point. But the high household debt issue is country wide. Property ownership in those two cities also isn't limited to being a resident of those cities either. A significant amount of properties are rented out and the landlord can live outside of the cities, so the effects of a drop in prices will be widely felt. Combined with the fact those two cities and surrounding areas represent a significant percentage of the total population. The US housing crisis was itself limited to a group of areas in the country in varying degrees as well, for example Florida got hit way harder than most places. The group was just far larger given the country's population is 10x the size of Canada. And Bank of Canada has started to add mortgage restrictions this year country-wide so they too see it as something that needs to be addressed nationally.

NathanCH 9y ago

That's a bit misleading, by no means was/is the bubble limited to these cities. More like B.C and Ontario.

randomdata 9y ago
That may be an exaggeration as well. As a resident of Southern Ontario, but not Toronto, the CREA data shows that home prices in my area were stagnant, to slight decline, for most of the last decade. It has only been in the last year that any meaningful price appreciation has been observed. And I attribute the recent price appreciation to an improving economy and near record low unemployment (currently 2.9%).
- crescentfresh 9y ago
  Also as a resident of Southern Ontario, but not Toronto, I concur.
- dblohm7 9y ago
  And regardless of the scope of the bubble, even if we conceded that it is all of BC and ON, the fact remains that the Bank of Canada has to act in the best interests (ha) of the country as a whole.