No Canadian housing bubble: Bank of Canada deputy governor

Feb. 23, 2010 | Market Update | By Aaron Rossetti

Via Reuters February 22, 2010 - The Canadian housing market is strong, but it is not experiencing a bubble, Paul Jenkins, senior deputy governor of the Bank of Canada, said Monday.

The federal government said last week it will bring in new mortgage rules to cool the housing sector and prevent home buyers, tempted by record low interest rates, from overextending themselves.

At the same time, it said there was no housing bubble, a point echoed on Monday by Jenkins, who was speaking at a panel discussion at the Government of Canada and Financial Times Global Business Leaders Day in Vancouver, where the housing market is especially hot.

"At the moment, we are certainly seeing a certain amount of the recovery in the Canadian economy coming from the housing sector" he said.

"I would certainly not say we are looking at a housing bubble," he added.

Unlike the struggling U.S. housing market, sales and prices of existing homes in Canada soared last year, boosted by the central bank's near-zero interest rates and the resulting low-cost mortgages. Many in the industry have forecast further strength in 2010.