Rising real-estate prices in Canada is causing risks to the world’s 10th-largest economy, according to a report released by the Organization for Economic Cooperation and Development on Wednesday.
The OECD report noted there are signs of “imbalances” in the Vancouver and Toronto real-estate markets along with its condominium segment.
Increased levels of indebtedness are “making households vulnerable to a possible decline in real-estate prices,” according to the report.
“Further measures may be needed, possibly targeted on certain market segments, if imbalances persist.”
“Canada’s low indebtedness and well-earned reputation for fiscal probity allow it room to respond by slowing the pace of consolidation as needed,” it said.
The report noted that steps by Finance Minister Jim Flaherty to tighten mortgage insurance rules in recent years have helped.
According to the OECD, since the country has been spared from a real estate collapse, this has allowed the country to continue its steady growth. The OECD estimates growth of 2.2 percent this year and 2.6 percent in 2013.