April 30, 2020
While the effects of the COVID-19 outbreak on the housing market are yet unknown, a new C.D. Howe Institute report provides a blueprint for policymakers and regulators on the tools and timing of interventions in the housing market to address threats to financial stability.
In “Calibrating Macroprudential Policies for the Canadian Mortgage Market,” authors Scott A. Brave, Jeremy Kronick and Jose A. Lopez use four financial stability indicators - the house-price-to-rent ratio, the price-to-income ratio, the debt-servicing ratio and the household-credit-to-GDP ratio – to create a model to assist policymakers in anticipating future crises.
