And the share of new mortgages going to highly indebted borrowers has started to creep up.3 Many of the same ingredients that were present in some housing markets three years ago— namely strong underlying demand, tight supply and low interest rates—are present again.
This time, however, we expect that the regulatory and other measures in place will support the quality of new credit and mitigate the buildup of imbalances in the housing market. This is not the time to let our guard down, though. Robust defences are especially important when difficulties abroad could affect us at home.