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.
  • ctrl-alt-del 2015-04-30 12:37:09 PM
    Mr. Poloz is a puppet of Harper`s administration, all conveniently turning blind eye on dirty Chinese money, laundered through our real estate for a cost of inflated values, causing irreparable damages to national economy, stability of our banking system (yet to be realized) and to all of us. Our boys are all in it and that is not from the goodness of their hearts. Bill C51 and formation of Canadian secret police meant nothing more than to secularize their intentions while fueling up the frenzy by rate cut from January 2015 following the oil collapse, and lies as to the state of economy and real estate itself. Our children are not obsessed by home ownership as many mistakenly refer to. In contrary they are panicking and acting from fear and self defense and so are their parents in attempt to help to save them from non affordability later on. Our lives have been affected for decades and perhaps generations to come, escalating through financial inability for most of young Canadians to separate from their parents to continue their own family lives. All natural processes. Reasons that our real estate market is unable to correct in logical ways should be clear by now. ctrl-alt-del

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  • Christa 2015-05-01 7:43:52 AM
    Same applies to Australia and N. Zealand real estate values due to Pacific proximity to China.
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  • Ross Kay 2015-05-07 10:24:59 AM
    House Prices Nationally on March 31st. had 38.9% of their current Market Value Appraisal at risk for correction.

    Mr. Poloz like all economists have no experience in how housing markets function.

    The bank and CMHC can't even calculate the number of first time buyers accurately even though they have the data for a 100% accurate count.

    I think the bank actually believes over 210,000 sales last year were first time purchases.

    Sure and frogs fly at the north pole.
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