(Bloomberg) — Parts of Canada’s housing market are showing strain, but one group isn’t buying into dire warnings about the end of a decades-long boom: the bankers writing most of the mortgages.
A number of forecasters, including Moody’s Corp., UBS Group AG and the country’s top housing regulator, are predicting a sharp correction over the next year. Canada’s largest banks aren’t worried: on average, the six largest lenders see price declines of about 3% over the next 12 months, according to forecasts they use to determine potential credit losses. Bank of Montreal sees no change at all in the nation’s average housing price.
Contrast that with the federal government’s Canada Mortgage & Housing Corp., which is calling for a 21% plunge in prices. UBS didn’t give a specific price forecast, but it named Toronto the world’s third-most vulnerable city to a “sharp correction” in housing prices.