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The overall level of risk to Canada’s financial system is largely unchanged from six months ago, the Bank of Canada said today in its biannual Financial System Review (FSR). While household vulnerabilities have moved higher, the ongoing economic recovery in Canada means that the overall risk remains the same. The Canadian financial system is resilient and functioning effectively.

The Bank continues to highlight two vulnerabilities related to Canadian households: the elevated level of household indebtedness and imbalances in some regional housing markets. A third vulnerability identified is the fragility of fixed-income market liquidity.

Strong regional divergences persist among housing markets. Job losses have increased financial stress for some highly indebted households in the regions most affected by low commodity prices. Meanwhile, in the greater Vancouver and Toronto areas, rapidly rising house prices and strong mortgage credit growth are increasing the share of highly indebted households. In these two markets, it is unlikely that economic fundamentals will justify continued strong price increases.

“This suggests that prospective homebuyers and their lenders should not extrapolate recent real estate performance into the future when contemplating a transaction,” said Governor Stephen S. Poloz.

The vulnerabilities described in the FSR could propagate shocks throughout the financial system if a major event were to trigger one of the identified risks. The most important continues to be a severe recession and an ensuing sharp increase in unemployment that impairs debt service and leads to a broad-based correction in house prices. The probability remains low as the economy continues to grow, supported by continued expansion in the United States, and accommodative monetary policy and fiscal stimulus in Canada.

Other key risks identified are a sharp increase in interest rates due to higher global risk premiums, stress emanating from China and other emerging-market economies, and a prolonged weakness in commodity prices.

Published twice a year, the FSR is intended to raise early awareness of the key vulnerabilities and risks to the Canadian financial system. It focuses on downside risks, rather than the most likely future path for the financial system.

Simon Fraser
Market Update

Simon Fraser Condos

Altaire by Polygon

Altaire built in 2008/2009 reaches higher then any other condo building in Metro Vancouver offering panoramic views.

Novo I by Intergulf

Novo I built in 2007 known for the amazing sight lines and views from most units and balconies up to 1000 sq ft.

Novo II by Intergulf

Novo II built in 2007 known for the amazing sight lines and views from most units and balconies up to 1000 sq ft.

Aurora by Polygon

Aurora built in 2006 with 103 condos featuring 36 unique floor plans ranging from 715 sq ft to 1500 sq ft.

One University by Millennium

One University built in 2005 is UniverCity's flagship building with luxury homes featuring semi private elevators.

Harmony by Polygon

Harmony built in 2005 was the first condo development at Univercity & as a result offers a unique setting & views.

Serenity Townhomes by Polygon

Serenity is a collection of 2 bedroom townhomes of 1100 sq ft ranging to 4 bedroom 2000+ sq ft townhomes.

The Hub by Liberty Homes

The Hub built in 2009 is set atop Nester's Grocery and steps from High Street giving these homes an urban feel.

Verdant by VanCity Enterprises

Verdant is a two storey town home building built with environmental design and stylish living spaces which complement the modern exterior of these SFU homes.

Origin by Porte Development

Origin is designed by GBL Architect & BYU Interior Designs, developed by Porte Development Corp. and marketed by Red Dot Real Estate.

Nest by Mosaic

Located on UniverCity High Street across from the new University Highlands elementary schools this refreshing building will add further depth to a growing community.

Highland House by Liberty Homes

A 12-storey concrete high-rise development and targeted towards Rental Investors and First-Time Condo Buyers.

Lift by Porte Development

Lift will be a wood frame building comprising of 56 homes. Building technologies, environmental features, and price points should be similar to Origin.

Altitude by Hungerford Group

Altitude will be a 2 tower development comprising of a 12 and 14 story building with a total of 210 strata units.

CentreBlock by Liberty Homes

CentreBlock at UniverCity atop Burnaby Mountain is the latest condo project with sales commencing early 2014. .

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