“Canadians shouldn’t count on home prices to be their main source of wealth gains. Real wealth is built through innovation, and hard work. Not through some magical asset inflation.”

“The correction underway in Canadian house prices is likely to persist for another two years, warns Bank of Canada Governor Mark Carney.
“We’ve seen the adjustment in the housing market. We think there’s a bit more to come over the next couple of years,” Mr. Carney told CTV’s Question Period in an interview broadcast Sunday.
Mr. Carney said rapidly rising prices experienced in Canada over the past decade are “certainly not normal” and Canadians shouldn’t count on home prices to be their main source of wealth gains.
“Real wealth is built through innovation, and it’s gained through hard work,” Mr. Carney explained in an interview taped before this weekend’s G20 finance ministers and central bankers meeting in Moscow. “It’s not through some magical asset inflation.” …
Ottawa has tightened mortgage rules several times since 2008 to cool the market. But interest rates still remain at rock-bottom levels, as do borrowing costs.
Mr. Carney said the pace of debt accumulation has slowed to about 3 per cent a year from 10 per cent.”

– from ‘More adjustment to come in home prices: Carney’, G&M, 17 Feb 2013

7 responses to ““Canadians shouldn’t count on home prices to be their main source of wealth gains. Real wealth is built through innovation, and hard work. Not through some magical asset inflation.”

  1. Real Estate Tsunami

    Now that Carney is leaving, he’s telling us the obvious.
    Good Riddance and God Save the Queen!

  2. My sentiments exactly and I’ll say it in French, bon débarras! After we saw what happened to entire nation-states like Greece, how could we expect a former Goldman Sachs employee to run the nations affairs. Did anyone check his background? If not, here it is in a nutshell and once you`ve read it, consider what shorting means in terms of stocks, then hedging your bets against an entire country:

    Carney spent thirteen years with Goldman Sachs in its London, Tokyo, New York and Toronto offices. His progressively more senior positions included co-head of sovereign risk; executive director, emerging debt capital markets; and managing director, investment banking. He worked on South Africa’s post-apartheid venture into international bond markets, and was involved in Goldman’s work with the 1998 Russian financial crisis.[5]

    Goldman’s role in the Russian crisis was criticized at the time because while the company was advising Russia it was simultaneously betting against the country’s ability to repay its debt.

  3. Carney forgot to add … unless you are a well-connected banker.

  4. Canadians especially Vancouverites do not know innovation, they’re all about the quick buck and doing as little work as possible..

    Canada will never produce a Steve Jobs, Mark Zuckerberg or Bill gates

  5. 4SlicesofCheese

    Anyone catch the Mansbridge bitumen At Issue roundtable on CBC? Asked if the bitumen bubble was the greatest threat to Canadian economy, two people mentioned the real estate bubble. Apparently it is common knowledge now.

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