Home Prices in Canada Are Too Rich for Higher Rates, Ex-Central Banker Says
- Nation’s housing prices have surged over past five years
- Higher interest costs are straining owners’ finances
Paul Beaudry
Photographer: David Kawai/BloombergThis article is for subscribers only.
Current home prices in Canada can’t be justified if medium-term interest rates stay elevated, a former Bank of Canada official said, underscoring the risk to one of the country’s most important sectors.
Paul Beaudry, who spent four years on the central bank’s rate-setting committee, said the outlook for the housing market remains highly dependent not only on the policy rate, but on longer-term fixed rates. If they don’t come down, “then it becomes much more difficult to support these valuations,” he said on BNN Bloomberg Television.