Bank of Canada official David Wolf said it is “premature” to say that Canada is currently in the midst of a housing bubble.
“Recent house price increases do not appear to be out of line with the underlying supply/demand fundamentals,” Wolf said. “We see the housing market requiring vigilance, not alarm.”
Despite latest results from the Canadian Real Estate Associate reporting that house prices have jumped 4.4 percent during the first eleven months of 2009 – with a predicted increase of 4.7 percent in 2010 – Wolf said that the Bank of Canada believes that the increases are based on “temporary factors”. According to Wolf, pent-up demand stemming from the recession combined with low mortgage rates are the primary drivers for the hot real estate market.
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