Canada's Housing Bubble

Analysis of the real estate bubble in Canada --

Ottawa to toughen CMHC oversight Print E-mail

March 30, 2012 Garry Marr

After earlier voicing concern over the activities of the country’s dominant mortgage insurer the federal government is toughening its oversight of the massive and economically vital organization.

TD chief backs Ottawa’s mortgage tightening Print E-mail

The federal government is stepping up oversight of the mortgage market, which the head of Toronto-Dominion Bank  believes is a good idea given the ripple effect a collapse in housing prices would have across the Canadian economy.

Speaking in New York at TD’s annual meeting Thursday, chief executive officer Ed Clark said he supports the government’s plan to cap the amount of mortgages banks are allowed to insure through Canadian Mortgage and Housing Corp.

BMO survey suggests interest rate hike worries 4-in-10 homeowners Print E-mail

March 28, 2012 The Canadian Press

TORONTO - Four-in-10 Canadians would be unsure about whether they could afford their homes if their mortgage rate went up by as little as two percentage points, according to a new study from the Bank of Montreal.

The survey, compiled for BMO by Leger Marketing, found 43 per cent believe an increase from — to five per cent from three per cent, for example — would either hamper their ability to pay or leave them on unsure footing.

Canada Banks Tighten Condo Lending Amid Bubble Fear: Mortgages Print E-mail

Mar 28 2012 Andrew Mayeda and Greg Quinn

Canada’s biggest banks are tightening lending standards for condominium builders at the urging of regulators, requesting higher pre-sales and deposits as policy makers warn the Toronto and Vancouver markets are overheating.

Some banks have been asking construction firms to put more equity into new projects in recent weeks, according to developers. Lenders have also been raising the percentage of condo units that must be pre-sold and are demanding higher deposits as conditions for financing, they said.

Canada Vs. Australia: No Bust In Canada, But A Recession Is Probable Print E-mail

Mar 28 2012 Igor Novgorodtsev


After the publication of my article on Australia, several readers contacted me pointing out that the United States' northern neighbor is afflicted with the same disease as its down-under cousin: a commodity-dependent economy, housing bubble, and overleveraged consumers.

Canada Housing Crisis? OSFI, Financial Regulator, Tells Banks To Go Back To Basics Print E-mail

Mar 27 2012 Daniel Tencer

Check yourself before you wreck yourself.

That’s the not-so-subtle subtext of a message from a federal financial regulator to Canada’s banks. The Office of the Superintendent of Financial Institutions issued a report Monday noting “a number of vulnerabilities in the financial sector" and instructed banks how to avoid a crisis in the housing market.

But the OSFI’s to-do list for banks was so basic, and so seemingly obvious, it raised the question of why the regulator felt compelled to release the report in the first place. Could it be Canadian banks are losing track of the basics of sound mortgage lending? Consider the following pieces of advice from the OSFI:

Bank regulator proposes heightened scrutiny of mortgage market Print E-mail

Mar 26, 2012 Tara Perkins & Grant Robertson

Canada’s financial regulator is proposing strict rules to tighten lending practices in the housing sector, a move that could cool the red-hot market after months of warnings about rising consumer debt.

The new rules would require banks to take a closer look at how much a property is worth before issuing a mortgage – and to know more about the monthly finances of borrowers before the money is doled out.

Canada’s mortgage body moves to slow booming housing market Print E-mail

Mar 23 2012 Tara Perkins, Grant Robertson AND Bill Curry

The federal government has set $600-billion as the limit for the amount of mortgage insurance CMHC can have outstanding.

Canada Mortgage and Housing Corp. has signalled it will dramatically curtail its growth in the mortgage market in the coming years in an effort to cool Canada’s sizzling housing sector.

Documents released by the Crown corporation this week show CMHC expects to increase mortgage insurance over the next few years at only a fraction of the pace seen recently.

The change comes because the federal government has set $600-billion as the limit for the amount of mortgage insurance CMHC can have outstanding. The move is a sign Ottawa is trying to engineer a soft landing for Canada’s $1.1-trillion housing market by restraining the credit available for homebuyers to rack up mortgage debt.

Vancouver Real Estate Correction Now Predicted Print E-mail

Dim lights

People Are Leaving Vancouver Print E-mail

Dim lights

Vancouver Condo Boom Print E-mail

Dim lights

Flaherty criticizes banks’ desire for government mortgage changes Print E-mail

Mar 23 2012 Postmedia News

"They must forget that they are actually the ones that issue the mortgages. It’s their market. It’s not my market. They decide what they want to charge in interest rates."

OTTAWA — Finance Minister Jim Flaherty saw irony Thursday in major banks seeking changes to mortgage rules from government, given the control the banks themselves have over the industry.

Flaherty said, however, the possibility of tightening the insured mortgage market — which has been done three times under the current Conservative government — is there. Those decisions, however, result from constant evaluation of the markets.

“I find it a bit odd that some of the bank executives are taking the position that the minister of finance or the government somehow should tell them how to run their business,” Flaherty said during an appearance in Stittsville, Ont., just west of Ottawa.

Treating your house as an investment Print E-mail

Mar 22 2012 Peter Watson

Today’s column comes with a strong recommendation to re-consider the value of your house and how that lower value may negatively impact your retirement.

For those who are over the age of 50, there should be ongoing planning of your anticipated cash flow during retirement.

Skyrocketing house prices bound to come down, BMO head says Print E-mail

Mar 21 2012 Grant Robertson

With growing concerns over household debt, a soft landing in housing is in the best interests of our customers and the national economy

Concerns about the sustainability of the high-flying Canadian housing market are “legitimate,” especially in the largest cities, the head of one of the country’s biggest banks said Tuesday as a price war rages across the financial sector over mortgage rates.

Bank of Montreal chief executive officer Bill Downe told the bank’s annual meeting in Halifax that soaring household debt levels are highlighting the need for a soft landing in the residential real-estate market. As a way of tightening lending, Mr. Downe said he supports a move toward shorter amortizations on mortgages in Canada to reduce consumer exposure to debt.

Homebuyers: Beware market sucker punch Print E-mail

Mar 20 2012 ROB CARRICK

You never want to be the last sucker in before a bubble bursts.

So be cautious, Toronto homebuyers. Don’t be the donkey who “wins” the final bidding war of this long, impressive rally in prices.

Canadian Housing Bubble Sentiment Print E-mail

Mar 19 2012 Macro View

Canadian Real Estate bulls have continued to cite the fact that real estate valuations have appeared "expensive" for years, yet, the momentum has continued to take prices higher. Real estate bears, on the other hand, claim that home prices have been so stretched from fundamental valuations that past price momentum is irrelevant. As with all asset classes, a change to investor sentiment regardless of the catalyst that triggers the change (eg. rising interest rates, government policy, extreme valuations, etc.) will dictate future real estate returns.

Tighter regulations needed against overheating real estate, household debt: TD Print E-mail

Mar 19 2012 Eric Lam

Canada’s real estate market and consumer debt levels have risen to unsustainable levels, and unless new mortgage regulations are introduced a sharp correction in both would be disastrous for the economy, Craig Alexander, chief economist with TD Bank, said in a report Friday.

Housing bubble a danger to economy, TD says Print E-mail

Mar 17 2012 CBC News

Bank warns household debt also a hazard

Overvalued housing markets in several Canadian cities and high household debt poses a "clear and present danger" to Canada’s economy, TD Bank warned in a report Friday.

The study by the bank’s chief economist, Craig Alexander, proposes the government introduce measures to keep personal debt levels from rising further.

News To the 'Burbs! Print E-mail

Mar 16 2012 Luke Brock

My Vancouver house-hunting triggers a flight response. What is lost when aspiring owners leave?

[  Editor's note: After a less-than-successful housing hunt in Vancouver, reporter Luke Brocki continues investigating alternatives in the suburbs, and talks to former city councillor Peter Ladner about the exodus of Vancouver's young to more affordable pastures. This is the third part of the series Priced Out, a partnership between The Tyee and the CBC. To hear and see more perspectives on this series, tune in to CBC Radio's On the Coast at 5:40 p.m. and watch CBC News Vancouver at 6 p.m.]

"Hey man, it's been way too long!" yells my old friend Sebastian Zielinski outside the Surrey Central SkyTrain station. He looks exactly as he did in high school, tall and thin, dressed in sweatpants, dirty sneakers and the kind of sweater you might find at a discount supermarket. Except today he's also mortgaging two real estate properties.

Would-be homebuyers shocked at Vancouver prices Print E-mail

Mar 16 2012 CBC News

First-timers' first look at the market a dismaying experience

It’s been a Canadian real estate maxim for years that even entry-level housing prices in Vancouver are high — for many, prohibitively high.

So, what are the challenges, obstacles and options facing people with a decent salary who want to buy their first home?

Reporter Kirk Williams tells us in the first in our CBC News series, "Priced Out", that there are lessons to be learned and realities to be faced by today's first-time buyers.


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