Average house prices are going up due to Vancouver and Toronto, but house market values are set based upon a small number of sales. In other words, it's not lik

Average house prices are going up due to Vancouver and Toronto, but house market values are set based upon a small number of sales. In other words, it's not like 30 million houses were sold this year to establish the upward trend. It's really a tiny fraction of them that are on the market and when it comes to VC/TO those sale prices are largely dictated by foreign investment. In VC there are entire neighbourhoods where 30% of condo units are empty all year round. The point is that the average market values going up does not represent a bubble forming that will someday cause bloodshed due to the Canadian economy going into a recession. The house prices in those areas are more detached or rather relative (i.e. when a foreigner invests in a property in Canada it's to protect that wealth from losing value relative to other places and even when Canada is in a recession the debt burden of the country is much less than other places). Poloz is not lowing the rate to help out the Canadian debtors make payments on those over inflated houses, after all unemployment is 6.8 percent and even the banks decided people didn't need it so they only passed on a fraction of the lowering [1]. No, he's intentionally lowing the currency value in an attempt to kickstart a new manufacturing investment wave that would normally come back to Canada given the oil prices collapse [2]. 1. http://t.thestar.com/#/article/business/2015/07/16/major-banks-dont-pass-on-interest-rate-cut.html http://t.thestar.com/#/article/business/2015/07/16/major-ban... 2. https://en.m.wikipedia.org/wiki/Dutch_disease https://en.m.wikipedia.org/wiki/Dutch_disease