In a brief news release today, Fitch Ratings stated that the “early signs of a cooldown in the housing market could be generally positive for the stability of the Canadian banking system and the sustainability of economic growth, though the full extent and pace of the housing correction remains unclear.”
Citing CREA’s most recent sales report, the ratings agency added that, “the latest sales numbers provide some initial evidence that risks of near-term overheating in the Canadian housing market may be subsiding. This could be a positive development for Canadian financial institutions as long as the labor market remains relatively stable. ”
The reduced near-term risk of a housing bubble will likely take some pressure off the Bank of Canada to tighten monetary policy.
You can read the news release here
About Fitch Ratings: Dual-headquartered in New York and London with over 50 offices worldwide, Fitch Ratings is a global rating agency “dedicated to providing value beyond the rating through independent and prospective credit opinions, research and data.”