A decline in underwriting standards played an essential role in the American housing boom and subsequent bust. That has not been the case in Canada, says the study released Tuesday.
Canadian housing policies, which avoided the sharp declines in underwriting standards seen in the U.S. “worked well in reducing the possibility of a housing bust in Canada,” said the report.
The C.D. Howe report comes on the heels of one from the Canadian Centre for Policy Alternatives, which said the Canadian housing market is a bubble ready to burst. It also shows the debate that economists are having over the direction of the market.
Virtually all major economists have already said that a U.S.-style meltdown will not happen in Canada. And the Canadian Centre for Policy Alternatives report also says a U.S.-style housing bust is the most extreme scenario, and the unlikeliest to happen. [full story-->]
Tony Wong
BUSINESS REPORTER
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