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Take Measures to Reduce the Housing Market in Canada Says IMF

Posted on 8th Oct 2014 by Mark Stern
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According to the IMF, Canada needs to create strong lending rules in order to decrease the market in housing plan that may cause risk in the economy and financial system of the country. Based on the report of the world economic outlook in Washington,  the fundamental values of the market of the housing plan in Canada is 10% higher and because of that, there will be economic growth balance in the upcoming years of 2015. The exports will improve the decreased in Canadian dollar that may result to a balance economic improvement.


According to the Washington-based group that the increased in the household debt and at too high level of housing market will remain important domestic weaknesses of the country and because of that, the country needs additional macro-prudential measures and to continue to watch carefully for possible difficulties. The risk in the market of housing plan should be continually be monitored closely to prevent problems in the economy and financial system of the country. Joe Oliver, the Finance Minister of Canada said that the additional past rules in mortgage has been effective way in curbing the increasing price gains but according to the IMF, the government need to set limitation with the accordance of the mortgage insurance to limit the risk in paying tax.


The real estate market in Canada has shown unanticipated strength this year when the mortgage rates decreased to its moderate and lowest record and according to the report of Nation Statistic Agency that there is an increased percentage in the household credit-market debt in the second and third quarter of 2013. Household credit-market debt includes mortgages and disposable income.  In the year 2015, Canada will have more balance growth if there is an increased in the investments of businesses and the exports, reported by the IMF.


There will be an increase percentage (2.3) in the gross domestic product this year and another increase in the year of 2015 by 2.4 % based on the forecast of the IMF and the decreased in the Canadian dollar will increased because of the exports and an increase demand in the US. The use of the accommodative monetary policy will still remain useful to help Canada in their economy and inflation modestly.


Canada need to take measure to slow housing market and held rein in the household credit-market debt to stop the risk in the economy and financial system of the country. The government of Canada need to address these issues and make stronger debt-credit ruled. The U.S recovery will benefit from the exports of Canada and reduce the Canadian dollar which will cause a cheaper price to the Canadian goods in the global markets. The key to the perspectives in Canada is the demand from U.S. However, the export demand will weaken the external demand that could cause a delay in the drive of the business investments and exports which will serve as the key to the economic growth of the country.

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