The Bank of Canada sounded an alarm about Toronto’s condominium market Thursday in its Financial System Review, warning that a correction here could bring on a shock that would spiral through the whole economy.
The bank said Canadian households, weighed down by record personal debt, are vulnerable to two shocks: A big drop in housing prices and sharp decline in the job market.
And it singles out the condo market as a potential catalyst.
“A specific concern is that the total number of housing units under construction has been increasing and is now well above its historical average relative to the population,” it said, adding this development is entirely accounted for by multiple-unit dwellings in big cities.
See on www.financialpost.com