The Bank of Canada confessed this week that speculation is partly responsible for the recent upswing in house prices, but doesn’t believe that higher interest rates are a solution to the problem. The negative impact on the real economy from higher interest rates would eventually curb investor speculation, but only after a potentially prolonged recession dragged down house prices nationally. Policymakers obviously don’t see that strategy as an effective solution.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services