The Unassuming Economist

“Housing markets strong with signs of overvaluation to differing degrees. After a brief pause, Canada’s housing market rebounded in 2014, fueled by low and declining interest rates (…). House prices have been rising at 5–6 percent (y/y) nominally through most of 2014 (almost twice the average pace in 2013). Most of the appreciation has been driven by Calgary’s housing market and single-family homes in Toronto and Vancouver (…). Since 2001, house prices have risen significantly—similar to other Commonwealth commodity-exporter countries— though Canada’s cycle seems to be lagging and relatively smoother. Staff analysis suggests a national real house price overvaluation (relative to levels justified by long-run fundamentals) between 7–20 percent, although with significant differences across regions and market segments,” according to the latest IMF report on Canada.