Canada’s real estate bubble went from a small localized problem in pricey cities to a country-wide failure. Excessively long use of low rates from the Bank of Canada (BoC) drove tens of thousands of excess home sales over the past two years. Now that rates are rising, purchase volumes have suddenly cratered and prices are beginning to come back down to normal. Just how many excess sales did the BoC stimulate? Let’s crunch the numbers, but first we should explain the how and why monetary policy influences sales.
