The most recent interest rate hike from the Bank of Canada is seen as an attack on the Canadian housing market in this article. Provincial governments are trying to walk a fine line of supporting housing markets in their current state without prices shooting up or collapsing over the next year.
Given the enormous price gains in recent years, the market remains hyper-inflated, and the four-month downturn into a bear market hasn’t even brought prices back to the year-ago level, with the average price for all types of housing up 3%, and the condo price up 21.4% year-over-year.
To cool a similarly nutty housing bubble in Vancouver, the government of British Columbia had passed a year ago similar legislation with a 15% nonresident foreign speculator tax. But worried about an outright implosion of the bubble, it has since been subsidizing with taxpayer money down-payments aimed at first-time buyers and condos, which has inflated the condo bubble and condo speculation to new heights.
Politicians – they’re desperately dependent on extracting property taxes from homeowners – don’t want the world’s most majestic housing bubble to implode. They just want it to remain stable so that taxes can be extracted from willing homeowners that have gotten rich off years of house-price inflation. But for now, the Ontario government is letting the market ride.
Read the full article over at Business Insider.
It’s the end of another week and that means that it’s time for another Friday free-for-all! This is our regular end of the week news round up and open topic discussion thread for the weekend.
Here are a few recent links to kick off the chat:
–BC Realtors to be banned from dual agency
–Toronto sales plunge
–Montreal on the rise
–Loonie going up
So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!
It’s been so long since rates were rising we’ve forgotten what it’s like, and yet it seems the tide is turning. Southseacompany points out this article over at the Financial Post: Three rate hikes this year?
The Bank of Canada raised interest rates on Wednesday, surprising many, and left the door open to more rate hikes in 2017 even as it pledged to pay attention to how higher borrowing costs would hit Canada’s indebted households.
To find out what a bunch of economists think, read the full article here.
It’s the end of another work week and that means it’s time for another Friday free-for-all!
This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–Flippers triggered crash, not subprime
–market to cool slightly in 2017
–Wealthy cashing in on property tax deferment
–Odds of rate hike grows
–Quantitive easing drives house prices
So what are you seeing out there? Post your news links, thought and anecdotes in the comments below and have an excellent weekend!
Southseacompany linked to this article forcasting the effect of new mortgage rules:
“In the year of implementation, we estimate that this new rule could depress demand by 5% to 10%, and shave 2% to 4% off of our current forecast for the average price level in 2018,” the authors said, as the proposed measures will act as another force that limits price growth in the future.
Those consumers, who often have as little as five per cent down, must qualify based on the posted five-year rate of the Bank of Canada, which is currently 4.84 per cent.
The economists suggest changes to tighten the rules on non-insured mortgages will lead buyers to “come up with a bigger down payment, opt for a lower priced home and scale back other debt,” and may even delay purchases all together.
Read the full article here.