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Echoing their assessment from earlier this year, the International Monetary Fund (IMF) says the Canadian housing market remains overvalued.
“House prices are high relative to both income and rents,” the group said in their latest global economic outlook, estimating that real average house prices in Canada are “about 10 per cent higher than fundamental values.”
IMF says the “domestic vulnerabilities” that the market represents call for “continued vigilance and may require additional macro-prudential measures.”
Limit the use of of government-backed mortgage insurance to limit taxpayer risk, the Washington, DC-based group suggests.
Still, despite the housing market warning, IMF predicts Canada’s economy will grow by 2.3 per cent this year and 2.4 per cent in 2015 — up from 2.2 per cent and 2.3 per cent, respectively, in the previous forecast.
For what it’s worth, IMF’s 10 per cent is also an “improvement” on the 20 per cent overvalued figure that Fitch Ratings gave Canada’s housing market back in July.