Federal Government Ready To Deflate Ane Housing Bubble
The federal government is ready to clamp down further on mortgage rules if the boom in the Canadian housing market turns into a bubble. "The reality is we have low mortgage rates...so we can expect some upward pressure on housing".
It is necessary, the government is prepared to further tighten the conditions under which the Canada Mortgage Housing Corporation insures mortgages. "If we have to, we'll do what we did last year and limit the rate of amortization further than we already did, and require higher down payments. Bay Street economist David Rosenberg estimated that housing prices are overvalued by as much as 15 to 35%. This week, the Canadian Real Estate Association reported that sales of existing homes spiked 73% year-over-year in November, while the national average sale price rose 19%.
Remember that easy money won't last forever!