Mark Carney kickstarted Housing Affordability Crisis by slashing Interest Rate to the Lowest possible at 0.25%, fueling rampant real estate speculation along with irresponsible QE and failure to implement alternative Policies to mitigate the problem
Carney slashed theĀ overnight rateĀ from 2.25% (Oct. 2008) to 0.25% (Apr. 2009) in less than a year. The rate cutsĀ kickstarted the housing debt boomĀ that fuel rampant real estate speculation which turned into todayās housing affordability crisis.
As if not bad enough, he also implemented Quantitative Easing (QE) irresponsibly and failure to implement alternative Policies to mitigate the problem. Unlike the U.S., Canadian banks also didnāt stop mortgage lending and this helped house prices reboundĀ too quickly leading to disastrous consequences.
When Carney left for the Bank of England in 2013, the rates were still justĀ 1.00%. And his successors (Poloz, Macklem) kept rates low for even longer just to exacerbate the crisis.
Final Verdict: Carneyās Rate Cuts Started the Problem, But Others Made It Even Worse
ā Carney lit the match, and others poured gasoline.
Analogy: Carney gave CanadaĀ painkillers for a broken legĀ (2008 crisis). Later leadersĀ never fixed the leg, just kept upping the dose (low rates + debt).
