Bank of Canada Governor "Tiff Macklem" confirmed that bank interest rates have nothing to do with the noticeable rise in house prices in Canada, as is often heard.

He confirmed that the main reason lies in the shortage of supply, adding that the central bank cannot provide a solution to the housing crisis through interest rates; as the supply shortage is a main cause of this crisis.

During his speech before members of parliament in the finance committee, Macklem stated that the rise in interest rates has a benefit in increasing housing costs, while noting that housing prices continued to rise during periods of both rising and falling interest rates.

Macklem added that we will not be able to solve the housing crisis through reduced interest rates.

Nor will we be able to solve it through high interest rates either; we experienced that in both situations with the suffering of rising housing prices.

The increase in interest rates caused the cost of obtaining a mortgage to rise, and it became more expensive for real estate developers to secure home construction. However, low bank interest rates can also lead to higher house prices by stimulating more demand, and with the rush to buy homes in an environment characterized by low prices, this in turn leads to automatic rises in house prices.

Macklem urged the federal government to provide an increase in the supply of homes to improve affordability.