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Date Posted: 10:22:18 1/27/23 Fri
Author: Jasper
Subject: Bank of Canada has it's own woes

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Pricking the housing bubble. The housing bubble had become an official issue for the BOC back in April 2021. “You won’t be surprised to hear that we also spent some time discussing what is happening in the housing market,” Macklem said back then in his opening statement following the BOC meeting, and he has been talking about it ever since.

And what was once one of the biggest most breath-taking housing bubbles in the world is now deflating at a rapid pace.

Home prices in Canada dropped by 17.4% in December from the peak in March 2022, and by 7.5% year-over-year, according to the Canadian Real Estate Association. Sales plunged by 39% year-over-year. The composite benchmark price of the Canada MLS Home Price Index for all types of homes has now dropped by C$151,300 in nine months since the rate hikes started.

Whether or not the BOC’s tightening will knock down inflation the way the BOC is projecting remains to be seen. But tightening has started to take down this splendid housing bubble that the BOC had so vigorously inflated and then so vigorously fretted about:

https://www.howestreet.com/2023/01/bank-of-canada-were-pausing-to-assess-whether-weve-done-enough-hikes-by-1-4-to-4-5-qt-continues/



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