March 21, 2017 / 8:32 PM / in 6 months

BRIEF-BoC's Schembri: clearly strong demand for housing in Toronto, Vancouver

March 21 (Reuters) -

* Bank of Canada’s Schembri: clearly there’s been strong demand for housing in Toronto, Vancouver; demand from foreign residents part of increase

* BoC’s Schembri: supply constraints are causing home prices to rise relatively rapidly

* BoC’s Schembri: high degree of leverage is a vulnerability; house prices in Toronto, Vancouver have remained elevated

* BoC’s Schembri: risk is that in a severe economic downturn, most vulnerable households would have difficulty with debt

* Bank of Canada’s Schembri: retail sales data that was reported today largely consistent with pick-up in growth we’re expecting

* Bank of Canada’s Schembri: downside risks could slow down rate at which we close the output gap; base case still mid-2018 Further coverage: (Reporting By Leah Schnurr)

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