Canada ‘Flying Blind’ on Lack of Housing Data, CIBC Says

Canada is “flying blind” on whether it has a housing bubble because proper economic data is often hidden, and policy makers should push for its availability, an economist at one of the country’s largest banks said.

“This situation is unhealthy,” Canadian Imperial Bank of Commerce economist Benjamin Tal wrote in a research note today. Policy makers “have an opportunity to chart a course that reduces any potential risk of a real estate bubble by making data availability a top priority.”

Lenders aren’t able to provide detailed information, such as the percentage of foreign homebuyers, for competitive reasons, Tal said. Some foreign investors are selling Canadian assets because of concern that a bubble may be forming, he said.

Bank of Canada Governor Stephen Poloz says the housing market is in a “soft landing,” while Pacific Investment Management Co.’s Canadian fund manager Ed Devlin said last month that housing prices may fall as much as 20 percent in the next five years.

To improve a “highly asymmetrical” debate, policy makers should push to make available more information such as mortgage re-financing, average downpayments and trends in rental housing, Tal said.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net

To contact the editors responsible for this story: Paul Badertscher at pbadertscher@bloomberg.net Chris Fournier

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