House price inflation set to plunge

Housing was top of the agenda at a meeting of federal and provincial policymakers earlier this week, amid signs that the Bank of Canada is perhaps preparing to hike interest rates. Meanwhile, with Toronto’s housing market going from bad to worse, there’s a growing fear that the housing bubble there is already bursting. Needless to say, a housing crash would hurt the economy badly, but we should warn that even a plunge in the rate of house price inflation would slow economic growth.