Thank you for the question.
I wouldn't use that term. With respect to the level of house prices, I would note that there are local markets in housing. I'm going to come back to that.
Overall, the level of house price valuations across Canada is about four and three quarters times income. The historic average is about three and a half times income. That gives you a sense of the extent to which house prices have moved.
What's different now from the historic averages is obviously the overall level of interest rates. It's not just the overnight rate of the Bank of Canada, but it's five-year rates and ten-year rates, which are influenced by us but also influenced by global interest rates. I mean, the ten-year U.S. government rate is less than 2%, and that certainly has implications for the Canadian ten-year rate as well.
As I think we're all aware, mortgage rates are extremely attractive, and that accounts for some of the move up in valuation. The point we've tried to make is that you can't rely on those rates staying there forever, so an individual should size their debt appropriately.
The level of housing activity, particularly the level of condo activity in some metropolitan areas, is quite high. In fact it's reaching in Toronto to levels last seen in the late 1980s, even adjusted for population. We have some concerns over those developments.
The second thing is that even within that national average there are higher levels of valuation, by a variety of metrics. We don't just look at one metric. There are some firmer valuations in some metropolitan areas as well. There are cases where valuations are firm, shall we say, and there's probably more downside risk than upside risk to the future evolution of prices. That's an environment that warrants caution.
I'll go back to my earlier answer—I don't want to use up all of your time—and a variety of steps that have been taken that have slowed the overall pace of not just credit card debt but the overall pace of debt accumulation of households. It's slowed some of the developments in the housing market.
I think what we're reinforcing is that the interest rate environment is exceptional, and exceptions eventually come to an end.