David Madani, of Capital Economics, said in a report out Friday that while the housing boom supported the economy through the oil shock in 2016, a further deterioration in housing affordability will cost the economy over time. “The abrupt slowdown in Vancouver’s housing market serves as a warning shot. As things stand now, the performance of the economy this year could hinge on the direction of the much larger overheated Toronto housing market,” Madani writes. “The new foreign buyer tax announced by British Columbia’s government in July doesn’t tell the full story either. “Overall, while the investment boom in housing supported the economy through the oil shock, the further deterioration in housing affordability and greater housing imbalances are worrisome, symptomatic of an economic crisis in the making caused by investor speculation and excessive financial leverage.”gmarr@postmedia.comtwitter.com/dustywallet

Source: National Post February 10, 2017 19:24 UTC