The IMF on Canada's Housing Market

Image Source: Curry, Bill. Globe and Mail, "IMF warns of significant risks from Canada's housing market",https://beta.theglobeandmail.com/report-on-business/economy/imf-praises-infrastructure-bank-plan-flags-housing-market-concerns/article35160977/?ref=https://www.theglobeandmail.com&service=mobile

Recently came across this article in the globe and mail, the full article can be found here. It seems that once again the IMF is warning Canada that our housing market is overheated and that this may have serious consequences for future economic performance.

Here the IMF notes how the Canadian banks credit ratings were recently downgraded expressing fears over the number of consumer loans and mortgages on their books and the potential risk that they present given the exceptionally high levels of consumer debt.

I was happy to see this little bit in the report:

Ms. Lim's staff statement also took issue with the foreign buyers tax approach introduced in British Columbia and Ontario that "discriminates against non-resident buyers." The IMF states that non-resident activity is not the sole driver of housing prices and the provinces should replace the foreign-buyers taxes with more effective tax changes aimed at discouraging speculative activity.

Where the emphasis is my own.

What are your thoughts on this? Are we heading for a correction? Or, alternatively, is there too much on the line for the government to allow a housing correction to actually happen? If that is the case, can we have this hypothesized 'soft landing'?

feel free to comment below.