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Canada’s overheated housing market is starting to feel the effect of Europe’s negative interest rates.

Yields on about $8.8 billion of Canadian mortgage bonds denominated in euros and francs are being pushed below zero as European Central Bank asset purchases help to drive down borrowing costs worldwide.

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Canadian banks turned to Europe for cheap funding over the past few years as regulators and the Bank of Canada sought to keep the housing market from turning into a bubble. Although Europe is only one avenue for financing, that European investors are willing to pay for the privilege to park cash in the bonds shows how the ECB’s program is being felt across the Atlantic.

“That’s why you’re seeing five-year mortgage rates where they are,” Altaf Nanji, who helps oversee $17 billion for Manulife Asset Management, said by phone from Toronto. “Regardless of what the Bank of Canada does, it’s really a reflection of where the yield curve is.”