Soft landing for the housing market. Interest rate rises some way off.

The Bank of Canada’s deputy governor Carolyn Wilkins believes the housing market and Canadians’ debt levels are still manageable. In an interview with the Globe and Mail she said that in line with the bank’s policy reiterated last month: “the housing market and household debt are going to evolve in a constructive way.” Ms. Wilkins pointed to the improving Canadian economy which she says continues to support the hot housing markets of Toronto and Vancouver and will see household debt levels, including mortgages, begin to moderate. The deputy governor said that it is likely to be mid-2017 before Canada’s output would reach full capacity; this should mean that interest rate rises are unlikely during 2016.