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    GRG55's Avatar
    GRG55 is offline iTulip High Commissioner, Select Premium Member, Canada and Persian Gulf
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    Default Re: The Elusive Canadian Housing Bubble

    Quote Originally Posted by GRG55 View Post
    Insane is a good description.

    Oldest son of a long time and close friend of mine just bought his first home a couple of months ago. He and a buddy of his decided that it was "cheaper" to pay the mortgage on a house than the rent on their separate apartments.

    They have a variable rate mortgage at a current interest rate that is less than 3%. His parents live in a upscale, but older neighbourhood. The house their son bought is in the same district, but on top of the hill overlooking them, about 20 years newer, and twice the size.

    When I saw the pictures of the "new" house I pointed out to his father that when we were at the same stage of life as his son, house prices to income levels were much more reasonable than they are now, and yet although we both were earning professional incomes we couldn't afford such a house. The difference? Interest rates on the debt. Back then they were double digits.

    Our bankers and politicians are wrecking the country...

    Humpty Dumpty? Or horses and barn doors?


    Canada tightens mortgage rules to help cool blistering Toronto, Vancouver housing markets

    December 11, 2015 4:58 PM ET

    OTTAWA — The new Liberal government on Friday confirmed it is tightening lending rules for residential mortgages, setting a minimum down payment of 10 per cent on the portion of home prices over $500,000.

    Finance Minister Bill Morneau said homes purchased below the new price ceiling will remain at five per cent...

    ...“We believe that by increasing the down payment . . . we will create a better buffer for people and make people more secure, and have the entire market be more stable,” Morneau told reporters in Ottawa.

    The federal minister acknowledged the new measure will affect fewer than 10,000 home purchasers, or one per cent of the total market...




    New mortgage rules to hit Calgary hard, economist says


    Dec 11 12:36 PM ET

    A change in the minimum down payment rules will only affect about 3.9 per cent of new mortgages across the country but one of the cities most impacted can least afford a change in regulations.

    CIBC deputy chief economist Benjamin Tal said the motivation behind the new policy, which will increase the minimum down payment from five per cent to 10 per cent for the portion of a property more than $500,000, is clearly to slow down the the Vancouver and Toronto markets.


    “Those markets also happen to be the most expensive ones,” said the economist. “The Ministry of Finance is touching the untouchable (when it comes to down payments).”


    But in the stagnating Calgary market, where November sales were 20 per cent below the 10-year average for the month, the impact could be devastating, said the economist. “Note, the the largest impact, close to 10 per cent, will be on Calgary due to its relatively large share of high-ratio mortgages — not exactly a city that needs additional cooling.”



    Last edited by GRG55; 12-13-15 at 11:21 AM.

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