“Where it gets concerning is if that strength starts to feed on itself and we get to the point where prices accelerate simply because people think prices are going to rise further.,” he continued.
The total value of residential real estate rose $238.4 billion in the third quarter, accounting for more than half of the increase in national wealth, Statistics Canada reported.
Mortgage borrowing remained robust in the quarter, with households adding $45.9 billion in new debt, bringing total mortgage debt to $1.9 trillion.
The data also showed a decline in the national savings rate, falling from 14% in the second quarter to 11% in Q3.
Similar to other forecasts, Fitch also sees Canada’s arrears rate remaining near historical lows—between 0.15% and 0.25%—through 2023.