By: Luke Jones, Published on November 29, 2017 05:18 PM, Last Update on November 29, 2017 02:20 PM
The Canadian economy is still at risk, most notably from household debts and inflated property prices, the Bank of Canada has said in a new report. However, the financial institution says some of the economical risks of recent years are getting better. The bank offered the assessment in its November Financial System Review.
“Our financial system continues to be resilient, and is being bolstered by stronger growth and job creation, but we need to continue to watch financial vulnerabilities closely,” Bank of Canada Governor Stephen Poloz said in a written statement.
“Overall risks to the Canadian financial system remain elevated. Some preliminary signs of improvement, however, are emerging,” the bank added. The financial review assesses important risks in the financial system and shows how stable the economic outlook is.
“Better economic conditions and several new policy measures support prospects for additional progress,” the report said.
On the same day as the Bank of Canada report, the Organisation for Economic Co-operation and Development offered a similar outlook. However, its report cautioned the escalating housing market and household debts are big risks on economic stability and have managed to overshadow record GDP growth this year.
“High house prices and associated debt levels remain a substantial financial vulnerability,” the OECD warned in its November economic outlook.
The housing market in several of Canada’s biggest cities remains a concern. People are spending too much of the monthly income on housing in Vancouver, Toronto, and more cities. House prices are relaxing, but not at assertive rates suggesting a rapid change. Canadians are also high indebted and could be impacted as the Bank of Canada continues to rise interest rates into next year.