Category Archives: Financial Tips

Were Flaherty’s Changes Too Late?

The fourth round of changes to Canada’s mortgage rules were designed to clamp down on an overheated housing market. Now, a week later, analysts are wondering if Finance Minister Jim Flaherty jumped the gun. Detractors are pointing to a real estate market that was already beginning to decline, both in terms of sales and price. Tightening mortgage rules during a period of corrective market action could grind the market to the halt.

While the Toronto market remains hot, overall the Canadian housing market has cooled. The Canadian Real Estate Association recently released that its benchmark index for home prices was up to 5.2 percent in May from a year earlier. Most notably, gains in the Vancouver market were shrinking. Not surprisingly, Toronto’s rate was up about 7.9 percent from a year ago. Continue reading →

Ottawa Drops the Hammer on Mortgage Rules

Back in April, FinanceĀ MinisterĀ Mark Carney remarked that “in exceptional circumstances, if there are issues that threaten financial stability, such as household debt… the bank could use monetary policy for that purpose.”

Just three months later, those exceptional circumstances have become reality.

On Wednesday, the Federal Government made their move to further tighten mortgage rules, addressing concerns over high Canadian household debt.Ā  Continue reading →

The Ripple Effect: How the European Financial Crisis Will Impact Canadians

News of increased financial strain in Spain today has caused the Bank of Canada to brace for a ripple effect on the other side of the ocean. Any spillover from the increasingly vulnerable European market is expected to carry over to North American, rocking the fragile U.S. banking sector before it lands on the doorstep of Canadian homeowners.

Households with high debt will be the first to feel the impact. Already debt-burdened households could begin defaulting on their mortgages as historically low rates begin to rise and Ā banks begin to tighten their lending restrictions in response to growing uncertainty. From there, it’s a domino effect of job loss, a housing freeze and decreased market action. Continue reading →

Can the Canadian Housing Market Fix Itself?

The Canada Mortgage and Housing Corporation released its second quarter housing market outlook today, stating that housing starts will likely moderate by the end of the year. While the market has remained hot through the first half of 2012, the Housing Corp. believes that both new and existing home market activity will eventually slow and even out.

Housing starts are expected in the range of 182,300 to 220,600 units this year, which is up from the roughly 164,000 to 212,700 forecasted back in 2012. The CMHC’s deputy chief economist, Mathieu Laberge, attributes this unexpected growth to condo construction, noting that the numbers varied significantly from month to month. Continue reading →

Fewer First Time Home Buyers Could Signal Trouble

A recent report from Canada Mortgage and Housing Corporation shows that there are fewer first time home buyers entering the nation’s real estate market. The recently released Renovation and Home Purchase Report, which highlights the key trends, analyses and statistics from ten major Canadian cities, predicts that the housing market could be headed towards trouble thanks to a decreasing number of first time home buyers.Ā  Continue reading →