Is this a case of stupid housing policy begets stoopid housing valuations?
The IMF, big bureaucracy accountable to no one that it is, in its infinite wisdom points out that Canadian home prices *may* be out of whack with reality given that people who pay taxes to the government of Canada just also happen to be on the hook for a lot of the day to day mortgage lending decisions of the mortgage industry in Canada (give or take a lot here or a lot there depending on the government oversight of the day, or not).
The IMF, of course, says Canada's home prices are the most over-valued anywhere in the world.
Cheap mortgage rates and banks' tendency to give money to folks they otherwise wouldn't because Joe Public will bail them out regardless has a way to do that to a market.
Perhaps the most salient observation in the IMF's pontification: “We suspect the fact that banks may benefit from government-backed insurance on mortgages (…) it sort of makes it easier for banks to do mortgages than other kinds of lending which presumably, we think, is going to be more useful for the real economy.”
It's not like Canada wasn't warned before... like in 2008 by an anonymous schlep living in his parent's basement in Victoria because, despite an above average household income, he and his wife couldn't afford much more than a crack shack in a shady Vic West 'hood.