Ottawa Considers Tighter Mortgage Regulations
It appears the powers that be in Ottawa read the newspaper. The media has been reporting for the last couple of months that Canada is in the midst of a real estate bubble and after what happened in the US, “Real Estate Bubble” is now a dirty word. Of course if you listen to the experts such as CIBC’s Benjamin Tal you will get a more realistic view of what is actually happening. In short the Government’s stimulus package is actually working. The lower interest rates we have been enjoying have increased home sales in Canada and in turn help boost the economy.
Well, the Conservative Government is now worried that Canadians are piling on too much debt while interest rates are low and will ultimately get into trouble when interest rates increase. Is their fear valid? Maybe, but I personally find most of my clients ar not stretching themselves thin and are keeping a healthy cushion to allow for an increase in rates. The Finance Minister said in an interview with CTV that they are considering increasing the minimum downpayment from 5% to something greater….maybe 10%. As well they would get rid of 35 year mortgages.
CIBC’s Chief Economist Benjamin Tal warns that any drastic changes could threaten our already fragile economy and any adjustments should be gradual. After all, the housing market is the only thing that is growing in the economy at the moment.
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