Bank of Canada Says Housing Affordability Recovery Still a Long Way Off

Canada's housing affordability recovery still has a long way to go, according to the Bank of Canada. Deputy governor Carolyn Rogers emphasized that restoring affordability requires more time and a significant expansion in supply. She noted that monetary policy alone is too blunt to address housing affordability, highlighting the need for better planning, infrastructure, and supply-side measures.

Rogers stated that interest rate policy has limited effectiveness in solving structural housing shortages, which carry broad economic and household finance implications. The central bank official underscored that rising house prices not only limit people's ability to buy homes but also push rents higher, while falling prices can reduce overall household wealth.

The senior Bank of Canada deputy governor emphasized the need for a mix of policies that expand supply, protect resilience, and reduce the economy's dependence on rising home prices. She noted that monetary policy can affect demand across the economy, including housing demand, but remains too blunt a tool to solve affordability problems on its own.