Bank of Canada is Still Worried About Home Prices

There has been a constant worrisome statement by the Bank of Canada concerning the increase of the price of homes and the increased levels of household debt.

Sylvian Leduc, the deputy Governor said earlier on that the chances or likelihood of an unforeseen shock to the economy is still low, however, if that it were to happen, households will have a hard time coping.

Leduc commented that “house prices are going up, people are reaching maybe a bit more and getting a bit more indebted. And the fact that the indebtedness is rising the most for highly indebted people is really worrisome.”

Leduc cautioned that if borrowers won’t be able to have their debts serviced, it could cause a risk to the permanency of the monetary system. Nonetheless, he pointed out that the strength of the system to hold out its major threat; an increase in unemployment.