BMO Nesbitt Burns looks today at what it would take to halt the rapid advance of the Vancouver and Toronto housing markets.
And of the five potential factors, senior economist Robert Kavcic sees not a single one on the horizon.
"Odds are that if this kind of price growth (especially Vancouver) continues, it will end badly – but that still looks to be some time down the road," he said in a research note.
Home prices in Vancouver and Toronto show no signs of slowing down, sparking concern about their frothy behaviour, though no Canadian economist is calling for a meltdown.
Both the federal and B.C. governments have moved to deal with the run-up in mortgage debt with some measures, though nothing like past moves at the Ottawa level.
In the wake of new statistics this week from real estate boards in Vancouver and Toronto, Mr. Kavcic says BMO has been asked what it would take to slow down those price gains. His answers:
A slowing economy or rising unemployment: "Not likely any time soon, with growth in B.C. and Ontario leading the country."
A jump in interest rates: "Umm, no."
More detached homes for sale: "Condo supply is coming to market in these cities, but detached supply ... is drum tight and not changing."
Affordability: "The concern is that rising prices don't slow activity, but rather beget even higher prices. The Vancouver condo market might be heading down this road now."
Government measures: "That's a no. At least not the variety (i.e., marginal changes to down payment requirements) most recently introduced by Ottawa."