Fund management firm Pacific Investment Management Co. says that the Bank of Canada should revert to talk of higher interest rates to halt the inflating property market.

PIMCO’s Ed Devlin says that removing reference to higher rates from official policy statements is fuelling the rising home prices and debt levels.

Devlin says that he believes Canada’s property market is overvalued by 10 to 20 per cent but with low interest rates and allowing adjustments for inflation, it could be 30 per cent overvalued with the potential for a large adjustment.

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