By Promit Mukherjee
OTTAWA, Oct 1 (Reuters) – Canada is on the right track to addressing the issue of housing affordability but still has a way to go and needs more time, senior Bank of Canada deputy governor Carolyn Rogers said on Thursday.
Restoring affordability will require more supply, better planning and infrastructure, regulations that protect resilience, and incentives that do not add demand to a market already short on supply, she told a business audience in Victoria, British Columbia.
Here are the highlights of her speech:
* As house prices go up they push rents higher as well as limit people’s ability to buy, but at the same time if prices fall it shrinks the overall household wealth. “It feels a bit like a trap,” she said.
* The affordability goal has to be a mix of policy which could increase supply, protect resilience and reduce the economy’s dependence on rising house prices.
* “We’re on the right track on many of these things, but we have a way to go and it will take time,” she said.
* Monetary policy can influence demand across the economy, including demand for housing, but it is too blunt a tool to deal with affordability issues
* There are no simple fixes to the monetary policy framework that can help
* The BoC needs to explain these trade-offs better and be clear with Canadians about what monetary policy can and cannot do, she said.
(Reporting by Promit Mukherjee, editing by David Ljunggren)
((Reuters Ottawa editorial; david.ljunggren@tr.com))
Keywords: CANADA CENBANK/
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