PIMCO says Bank of Canada should talk of rate rises

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Fund management firm Pacific Investment Management Co. says that the Bank of Canada should revert to talk of higher interest rates to halt the inflating property market. PIMCO’s Ed Devlin says that removing reference to higher rates from official policy statements is fuelling the rising home prices and debt levels. Devlin says that he believes Canada’s property market is overvalued by 10 to 20 per cent but with low interest rates and allowing adjustments for inflation, it could be 30 per cent overvalued with the potential for a large adjustment. Read the full story.
  • Mike Maguire on 2014-10-02 9:23:07 AM

    People buys homes based on emotion not what the BofC says in a statement. They prefer to debate the best stainless steel appliances and not the GDP or quarterly inflation. Perhaps the solution of rising home values might be to ban the Home Network from TV.

  • Ron Butler on 2014-10-02 12:39:28 PM

    People buy homes based on the availability of financing. I agree there is too much house porn in the media right now but ultra low mortgage rates are the true fuel for a 5 year run up in property values in TCV.

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