BMO - Canadian Housing Market a Balloon Not a Bubble

The housing boom in Canada is more likely to cool than correct, according to a new special report released today by BMO's Economics Department.

"With the exception of a few regions, valuations remain only moderately high across the country, especially when low interest rates, demographics, construction costs, land-use regulations and foreign capital inflows are considered," said Sherry Cooper, Chief Economist, BMO Financial Group. "Low interest rates should hold affordability in check for some time, allowing incomes to catch up with higher prices and restore proper valuations."

Balloon, not a bubble

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