Apr 05, 2021
By Jane Brown
There is a call by some economists for cooling measures as demand surges in the red hot housing sector.
David Rosenberg is former chief economist at Merrill Lynch and says the current market is giving him flashbacks to the early years of the 2000s when the U.S. housing market entered a bubble that ended in disaster.
At that time in 2006, the Bay Street veteran says he warned clients and hedge fund managers of a doomsday scenario, that a collapse in the housing market could take down the entire economy with it.
Rosenberg says the current financial conditions in Canada’s housing market are similar to the U.S. market then, and politicians should be gravely concerned.
The stark warning comes as record-low interest rates and soaring demand for housing during the pandemic have pushed real estate prices to new heights.
There is no indication from Ottawa whether new measures will be taken.
Ahead of the April 19th budget, a spokesperson for the Ministry of Finance would only say they continue to closely monitor the health and stability of the housing market.
The average price of a home in the Toronto area rose nearly 15 percent year over year in February to just over a million dollars.
Detached homes in the 905 in places like Brampton and Durham Region sold for almost 30 percent more than last year.