In an exclusive interview Thursday on BNN, Bank of Canada Governor Stephen Poloz surprised some observers with his comments on Toronto's housing market — and what the central bank can, or can't do, about speculative activity rippling across the city.

"The fact is, when you are looking at making an investment you think will make you 20% or more over the next 12 months, and you have to borrow the money to make that investment, is a quarter point or a half a point going to make a difference to that decision? I don’t think even a five percentage point difference would take you away from that," he said.

Here's a sampling of what economists are telling BNN about Poloz's remarks.

"A five percentage point rise in rates would not only burst the housing bubble but would crush the economy"

-Gluskin Sheff Chief Economist David Rosenberg

"I think there is an argument to be made regarding the first point he makes – 25 or 50bp is not likely to move the needle on housing, at least not in the short term. As for mortgage rates around 7 to 7.5% in the second half of his comments? I think this is clearly a rhetorical flourish, because it is difficult to think about any economic model or framework where that kind of sudden increase in interest rates doesn't have an impact – not only on housing, but on the economy more broadly and thus spilling into the housing market."

-TD Economist Brian DePratto

“Speculators are certainly not the only actor in the market, and all the real buyers would be very much affected by a change in interest rates. And, hence, speculators’ views on the market would shift as real buyers are affected. So, I strongly disagree with the statement. The governor is essentially saying that interest rates don’t matter for the real estate market, which I just can’t buy.”

-BMO Capital Markets Chief Economist Doug Porter



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