Tag Archives: Housing Market

Banks Concerned over Mortgage Rules

Canada’s big banks have been in favor of tighter mortgage rules.  Now that they’re here, there’s concern that the department of finance has gone too far.  David McKay, head of Canadian banking at RBC points out “This is not like turning a Ferrari, this is a big ship and it takes a while to turn, and sometimes if you over steer, you can’t re-steer the other way.”  This is the … Read More

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Beat the Mortgage Tightening Deadline

One week ago, the department of finance announced its latest round of mortgage rule tightening.  The four rule changes are as follows: Reduce the maximum amortization to 25 years from 30 years. Lower the maximum amount Canadians can borrow when refinancing to 80% from 85% of the value of their homes. Reduce the maximum gross debt service ratio to 39% from 44% Limit the availability of government-backed insured mortgages to … Read More

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Mortgage Refinance versus Mortgage Rates

With the ability to control mortgage rates stripped from the hands of federal policy makers, they’ve had to look for alternative methods of moderating housing prices and Canadian debt levels.  Four rounds of mortgage rule clamp downs in as many years is testament to our government’s yearning to intervene in this area.  Aside from the dramatic reduction in the maximum amortization, the biggest change has been the elimination of high … Read More

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CMHC Back to Basics

The latest round of mortgage rule tightening brings Canada Mortgage and Housing Corporation’s (CMHC’s) mortgage rules back in line with its original mandate.  Helping Canadians buy their first home.  CMHC was established in 1946 as a government-owned corporation to address Canada’s post-war housing shortage.  Over the years scope creep entered the picture and the government insurer began meeting market needs by allowing borrowers to refinance their homes to 95% of … Read More

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Flaherty Tightens Mortgage Rules

The department of finance ambushed the financial services industry late Wednesday with the announcement that they are tightening mortgage rules.  Just 2 weeks ago the Office of the Superintendent of Financial Institutions (OSFI) released mortgage rule changes after weeks of deliberation and industry feedback.  Apparently the government didn’t like the process or the results and heavy handed a few changes of their own. The changes announced are a reduction in … Read More

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CMHC Releases Canadian Housing Market Outlook

Canada Mortgage and Housing Corporation (CMHC) released their Second Quarter 2012 Canadian Housing Market Outlook on Thursday.  The Canadian housing market is expected to remain strong over the remainder of 2012 and for all of 2013.  This, in a nutshell, is the CMHC’s mid-term forecast for the housing market.  Although there will always be pockets that stray from the norm, it’s largely expected that we’ll have a balanced market with … Read More

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Banks Respond to Appraisal Concerns

In the wake of the Office of the Superintendent of Financial Institution’s (OSFI’s) letter to federally regulated financial institutions, (FRFI’s) the big banks are already responding to the concern on property valuations.  “We have tightened our process, and make sure that we are getting an accurate read,” reported RBC through David McKay, its head of Canadian banking.  TD bank however feels further tightening isn’t necessary.  “We’re really not seeing a … Read More

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Home Prices Still Rising

Canadian real estate prices grew at an annual rate of 5.2% in April, according to the Canadian Real Estate Association (CREA).  Some refer to this as moderate growth while others scratch their heads and keep wondering when that 10% correction will come into play.  The problem with the bubble believers is that they’re ignoring the strong housing market fundamentals. The statistics suggest that Toronto’s real estate prices are catching up … Read More

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Experts Warn of Housing Price Increases and Decreases

Am I the only one that’s confused?  I never bought into the “bubble mania” that the industry “experts” were selling, but now there’s talk of a housing shortage in the Toronto market driving prices up to Vancouver levels.  The Toronto Star‘s Sunday edition featured the front page warning. Developers aren’t stupid.  Along with the financiers that control them, they won’t break ground until they’ve sold the majority of their project.  … Read More

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Canadian Mortgage Debt Moderates

Two of Canada’s big banks (CIBC and TD Bank) report that consumer credit is rising at its slowest pace in nearly 20 years.  Total household debt which includes consumer and mortgage credit is now rising at only 5% per year, the slowest pace since 2002 according to CIBC.   Mortgage credit on its own rose by 6.3% on a year over year basis which is well below the 7.3% growth rates … Read More

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