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Housing won’t plunge: Board

Another hike in borrowing costs yesterday is likely to further soften Canada’s housing market, but a major think-tank says the slowdown in recent months won’t produce a “free fall” in demand.

Another hike in borrowing costs yesterday is likely to further soften Canada’s housing market, but a major think-tank says the slowdown in recent months won’t produce a “free fall” in demand.

The Bank of Canada raised interest rates another quarter point — the third such increase in three months — and the banks bumped up their prime rates by the same amount, pushing up the costs of mortgages linked to prime.

But the Conference Board of Canada says it sees a pause in the real estate market — not a U.S.-style collapse — after a surge in prices for the last several years in most Canadian cities.

“The housing market has lost its lustre,” Mario Lefebvre, director of the board’s Centre for Municipal Studies, said in a report yesterday.

“No doubt about it. However, this will not lead to a free fall for Canada’s housing market. This country will not experience home price declines to the tune of what we have witnessed in the United States over the past few years.”

 
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