Bank of Canada governor Tiff Macklem says the central bank is seeing early signs that people may be purchasing homes solely because they believe prices may go up.
Macklem says rising prices in particular for single-family homes are still a long way from the heated market the country observed about five years ago.
Fuelling the increase has been a combination of demand for more space as millions of workers do their jobs remotely, constrained supply and rock-bottom interest rates are driven low by central bank actions.
The bank’s key policy rate has been at 0.25 percent for about 11 months, and its quantitative easing program is trying to reduce the rates paid on things like mortgages to drive spending.
Mr. Macklem added there are early indications of what he calls “exaggeration”, with many expecting the recent price rise to continue indefinitely.
The central bank plans to keep its key rate low until the economy recovers, expected sometime in 2023, and adjust its bond-buying program over time.
This content is also available in: Tiếng Việt