Thus, I took it as a warning sign.

Mr. Porter noted the shift in the central bank's tone over the past six months where housing is concerned.

Notably, Calgary, Toronto and Vancouver were well above the national average, at 9.5 per cent, 7.4 per cent and 6.5 per cent, respectively.

"There is no more brave talk about a soft landing for housing."

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What's important here is that the strength in various housing markets is "localized," Canada Goose Buy Liuigno Parka Ireland as Mr. Porter put it, and thus "broad" policy measures are not necessarily the best way to deal with it.

"Housing starts have remained broadly in line with demographic demand in recent months," it added.

"The focal point of that 'stronger than expected' housing market has been in Calgary, Toronto and Vancouver, as we (and others) have noted. Most of the rest of the country is not seeing particular strength in housing."

Housing markets in eastern Canada "appear to show signs consistent with a soft landing," given slower price increases and sales volumes.

In its monetary policy report today, the central bank said housing activity "has been more robust than anticipated, buoyed by continued very low mortgage rates and exhibiting strength beyond a rebound from weather depressed levels earlier in the year."

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Over all, Bank of Canada Governor Stephen Poloz and his colleagues noted "renewed vigour" in residential real estate. They also noted stronger car sales.

As in, "higher interest rates would hit all markets, including many cities that don't need cooling."

´╗┐Bank of Canada raises red flags over Toronto

However, it highlighted big regional divergences colouring this picture.

"However, sales of existing homes have picked up noticeable since the beginning of the year, to a four year high This is contributing to sizable increases in house prices, although the national picture continues to mask important regional divergences."

"Housing activity has been more robust than anticipated, buoyed by continued very low mortgage rates and exhibiting strength beyond a rebound from weather depressed levels earlier in the year," it said in the report.

"They have frankly been surprised at the underlying strength in housing and consumer spending, and now explicitly tie that to low interest rates," Mr. Porter said.

Just this week, Moody's Investor Service also flagged concerns of Canadian home prices, warning the housing market and swollen household debt levels are a risk.

Remember that former Bank of Canada chief Mark Carney and the late Jim Flaherty, Canada's finance minister at the time, each took measures as household debts got out of hand.

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"While a good part of the strength can be explained by favourable demographics and strong employment gains in parts of the country, it nonetheless suggests that household imbalances could increase further," the central bank warned.

"Earlier they were convinced (perhaps bravely so) that the housing market was on course for a soft landing," Mr. Porter said.

According to the Teranet National house price index, home prices in Canada rose 0.3 per cent in September from August and 4.9 per cent from a year earlier.

"Now, they are openly suggesting that it has been stronger than they expected, and thus the associated risks with household debt 'are edging higher,'" he added.

"Simply, this is the main reason the bank would be extremely reluctant to consider cutting rates (in a stress situation)," said chief economist Douglas Porter of BMO Nesbitt Burns.

It did not cite specific cities. Nor did it say they were headed for trouble. Indeed, in an interview with The Globe and Mail's Carrie Tait, senior economist Randall Bartlett of Toronto Dominion Bank said the sky's not falling.

"This contrasts with major cities in Ontario, Alberta and British Columbia, where housing markets are generally robust and much tighter," it said.