Toronto Home-Price Gains Aren’t Sustainable, Poloz Warns
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Bank of Canada governor reminds buyers prices can also fall
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Rate of appreciation is ‘divorced’ from fundamentals
The speculation increasingly driving Toronto home prices is unsustainable, the head of Canada’s central bank said, warning buyers they should be prepared to weather a potential correction.
At a press conference Wednesday in Ottawa, Bank of Canada Governor Stephen Poloz cited recent reports showing prices in the country’s biggest city are rising faster than 30 percent, a pace that’s “divorced” from typical metrics of demand such as income growth and demographics.
“There’s no fundamental story that we could tell to justify that kind of inflation rate in housing prices, and so it’s that gap between what fundamentals could manage to explain and what’s actually happening which suggests that there is a growing role for speculation,” Poloz said…
Toronto Home-Price Gains Aren’t Sustainable, Poloz Warns
