Lower rates won’t increase chance of a crash says CMHC boss
The CEO of the Canada Mortgage and Housing Corporation says that he does not expect to see a crash in the housing market as a result of the lower interest rates. Evan Siddall told CBC’s Amanda Lang that: “Lower rates of course make it cheaper for people to buy houses and we are concerned about that.” But he added that the agency is monitoring the situation and its analysis suggests that a 0.25 per cent cut in interest rates is not going to have much impact on house prices. In fact he says that the rate cut does the housing sector a favour by helping to boost the wider economy so the overall effect is positive. The biggest concern for CMHC Mr Siddall said is the spectre of growing unemployment as a result of the oil industry downturn: “When people lose their jobs, that’s when they sell houses." He predicts that the agency is keeping an eye on the employment levels in Alberta, Saskatchewan and Newfoundland and Labrador but that the real impact of job losses would be “12 months down the road” allowing time to adjust policy as required.