Poloz’s latest stance at odds with previous statements?

Poloz’s latest stance at odds with previous statements?

Poloz’s latest stance at odds with previous statements? One broker believes the Bank of Canada is sending mixed messages about the state of the housing industry based on who – and what – it is trying to influence.
 
Mark Carney was almost a lot more eloquent [than Poloz], and I had a much better understanding of where things were going,” Jivan Sanghera of Dominion Lending Centres Home Capital Solutions told MortgageBrokerNews.ca. “It’s almost a situation where in some cases they use these policy announcements to influence the market and other times, when it’s time for the truth to be told, it’s a much more factual scenario.”
 
The criticism comes after the governor of the Bank of Canada assured Canadians the housing market is not currently in a bubble, despite his belief that housing prices are 10-30 per cent overvalued.
 
It may be too little, too late, though. The Bank of Canada may have scared some potential homebuyers away with earlier warnings that seem to have now been softened.
 
Still, Sanghera agress with Poloz’s assessment that there is no housing bubble.
 
“We don’t believe we’re in a bubble,” Bank of Canada Governor Stephen Poloz told the House of Commons Standing Committee on Finance, according to the Globe and Mail. “Our housing construction has stayed very much in line with our estimates of demographic demand … there’s no excess.”
 
According to Poloz, skyrocketing real estate prices aren’t being fueled by speculation – a practice accused of inflating investment bubbles – but by consumer demand.
 
“This is one of the byproducts of what we’ve been through. It’s not something that happened simply by itself,” he said. “It would be very unusual to have that and not have a degree of overvaluation.”
 
In December, the Bank of Canada stated it believes the housing industry is overvalued by 10-30 per cent; an estimation that is in line with that of other pundits.
 
For example, TD Bank and the International Monetary Fund (IMF) both believe Canada’s house prices are overvalued by ten per cent; Fitch Ratings suggest they are overvalued by 20 per cent and The Economist believes the figure sits around 30 per cent.
 
However, there are some that are more critical.
 
Deutsche Bank stated in early 2015 that it believes Canada’s housing is 63 per cent overvalued.
And perhaps the most vocal among those postulating a housing bubble, portfolio analyst Hilliard Macbeth has stated the housing industry is due for a 40-50 per cent correction.