Article content

Earlier this week several heads of Canada’s biggest banks warned about a possible correction in the housing market. The comments, delivered at an industry conference in Toronto, were perhaps not unexpected given that senior policy makers including Bank of Canada Governor Mark Carney have been saying pretty much the same thing for the past year. What was surprising was that only days after the comments were made Royal Bank of Canada, Toronto-Dominion Bank and Bank of Montreal have all chopped their mortgage rates.

In other words, they’re making it easier for consumers — who are already carrying record debt loads — to buy more houses, take on more debt and potentially drive prices even higher.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Is real estate overheated? The bubble discussion rages on Back to video

So is the housing market headed for a correction or not? It seems the debate is far from over.

Helmut Pastrick, chief economist for Central Credit Union 1, the main trade association for credit unions in British Columbia and Ontario, argues that the industry is just highly sensitive to potential dangers “because of where we have come from in the last three years, because of the financial crisis and what happened in the U.S. [housing market].” People are jumpy and that makes them more prone to putting up maybe more red flags than are warranted.