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Evidence mounts that speculation is behind Toronto's property bubble

Difficult for federal govt to intervene using mortgage insurance rules

Ottawa

TORONTO'S housing boom is unrelenting. Prices in Canada's largest city surged more than 20 per cent over the past year, the fastest pace in three decades, data released last week show. Some of the city's neighbouring towns are posting even bigger gains.

It has become a matter of considerable alarm. Stability is one concern - if the market tumbles, so will Canada's economy. Pricier real estate also drives away less-affluent, younger people and boosts the cost of doing business, eroding competitiveness.

"I don't think anybody is cheering," said Doug Porter, the Toronto-based chief economist of Bank of Montreal, who used the dreaded "bubble" word last week to describe the market. "I don't see...

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