From the Globe and Mail;
IMF casts nervous eye on Canadian housing market
Posted on Thursday, December 22, 2011 12:55PM EST
It is worth looking at the whole article but here is a pertinent excerpt:
With household debt at about 150 per cent of disposable income, the domestic spending boom that helped Canada weather the financial crisis already is at its limits.
A collapse in housing prices would be a serious blow to the economy because of the link between consumer demand and household wealth.
The IMF, in its annual report on Canada’s economy, estimates that a 10 per cent decline in housing prices could result in a 1.1 per cent drop in personal consumption, excluding durable goods, which would correspond to loss 0.5 per cent loss in gross domestic product.
Now you know why Carney is worried, but he wont do anything about it except jaw-bone away.
