writes Porter in a report<\/a>.<\/p>\n\u201cThe risk is that BoC rate cuts could send a loud message to potential home buyers: \u2018All is forgiven, the taps are open wide again, and let loose the borrowing,\u2019\u201d he warns.<\/p>\n
Porter notes that a rate cut would run contrary to policymakers\u2019 efforts in recent years to steer Canadian housing to a soft landing, rather than a crash.<\/p>\n
\u201cAfter years of struggling to guide the good ship Canadian housing in for a soft landing, the last thing policymakers want to see is a renewed takeoff \u2014 lesson learned in 2015,\u201d he continues.<\/p>\n
Since 2016, which was a record year for home sales, all three levels of government have introduced policies, including foreign homebuyer and vacant-home taxes, with the aim of calming an overheated market.<\/p>\n
Meantime, the Bank of Canada has hiked the overnight rate five times since the summer of 2017 and likely isn\u2019t keen on doing an about face.<\/p>\n
Although this cocktail helped put a lid on parabolic price movement, Porter notes that May home sales were up 6.7 percent annually, the largest such gain in any month over the past three years.<\/p>\n
\u201cWhile prices are mixed across the country, many of the weakest markets \u2014 primarily in the West \u2014 are showing signs of stabilizing, while the robust markets remain robust,\u201d writes Porter.<\/p>\n
\u201c[T]he case for BoC cuts is simply not there\u2026 yet,\u201d says Porter.<\/p>\n
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