Mark Carney, the Governor of the Bank of Canada gave a talk recently in Toronto, advising Canadians not to get too comfortable with the housing market recovery. He noted that debt is being paid off and sales are slowing somewhat, which at this juncture is having positive effect on the housing market and the economy. But, Carney warns investors, be cautious in any real estate dealings you may be considering.
Housing starts are decreasing, even though in the condo market there is still a tendency to overbuild. This overbuilding may flood the market with units, further causing prices to decrease. The decrease in the debt load, down roughly six percent and some positive movement in the resale real estate market are also positive signs.
Carney still advises caution over all against upping that debt load once again. It is typical for spending to reaccelerate just after spending has been curbed by governmental policies. Canadians should not get complacent and fall into that trap. So far, Carney notes, there have been no indication that a reacceleration is underway. The warning is totally cautionary at this point.