Wednesday January 20th, 2010 - Bank of Canada Sees No Bubble

A major advisor at the Bank of Canada says that is it wrong to declare that the country's housing market is a bubble.  David Wolf, the advisor at the bank says that policy makers are unlikely to raise rates any time soon.

He says that not only will the government raise rates in the long -term to cool off the housing market, it is unlikely to see the effects of inflation for a few years.  The country is seeing the lowest mortgage rates it has seen since the Korean War.  The country saw the largest jump in existing home sales in November.

The Bank of Canada was able to cut its benchmark lending rate to a mere 0.25% in April of 2009 and has continued to keep them low to boost economic recovery.  Many analysts think that the rate will be raised in late 2010.

Chief economist at TD Bank Financial Group of Toronto sees over valuation in the housing market, and he expects a five to ten percent pull back in housing prices over the next few years.