Since the real estate market has seen a recent boom, everybody is talking, getting anxious and worried that the government will step in to intervene to prevent a ‘housing bubble.’ Interest rates are also currently relatively low compared to this time five years ago. Flaherty says he will monitor the situation but will not currently take any action. He does however, plan on meeting with developers to discuss potential reasons as to why the market has seen a recent boom.
Part of speculation and talk about why there is a current boom has to do with interest rates. Speculation says that buyers are afraid of rates spiking high in a short period of time to come therefore, they are on a buying frenzy now to take advantage of the low interest rates and lock in. Statistics from MLS (Multiple Listing Service) states that the average home price was just over $385,000.00 for the month of September this year, an 8.8% increase compared to this time last year.
With the Bank of Canada’s recent projection that variable rates will be remaining constant for some time, Flaherty acknowledged that this could attribute to this booming housing market. At the end of the day, based on Flaherty’s comments, it is a waiting game to see how the market will progress or regress in the next 3-6 months. Once this has been analyzed, it will be revisited and decisions will be made once again.