Bank regulator sees growing concerns in real estate even as credit quality holds
BNN Bloomberg
Canada's bank regulator says it is preparing for weakness in the housing market to potentially last throughout 2023 as it flags the sector as a growing concern.
The Office of the Superintendent of Financial Institutions says in its latest annual risk outlook that, while not making any forecasts, the housing market is its top source of worry as high rates mean higher default probabilities.
Superintendent Peter Routledge however says that so far credit quality still looks quite strong, and residential real estate remains sound, as the overall economy shows resilience and unemployment stays low.
Routledge says the effects of high interest rates on credit quality have so far been far more benign than what observers might have predicted, but that risks are still out there.
