Bank of Canada says premature to talk of housing bubble

(Source: Reuters)

The Bank of Canada thinks it is too early to talk about a housing bubble since recent house price increases do not appear to be out of line with underlying fundamentals, a senior official said on Monday.

David Wolf, adviser to Bank of Canada Governor Mark Carney, also said that if the central bank raised interest rates to cool the housing market now, “we would, in essence, be dousing the entire Canadian economy with cold water”.

Record low interest rates have helped fuel a housing boom, prompting some analysts to fret about a possible bubble.

Read Jeffrey Jones’ full article “Bank of Canada says sees no housing bubble yet” in Reuters (January 11, 2010).

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