Time for government to fend off deflation

It may be time for the federal government to jump start the housing market to fight off deflation, effectively reversing its past ‘cool-down’ strategy, according to an assessment by the Canadian Real Estate Wealth editorial team.

The BOC has maintained its position that the market is robust, forecasting a 2.5 per cent increase for 2014, using as a base the 1.8 per cent increase in 2013.  Still, the slowing down of construction and low inflation may signal the need for the BoC to  encourage more activity in the real estate market.

Positive inflation has to occur, and the BoC can take the lead by lowering interest rates.

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