Ottawa could take drastic measures to slow the housing market
VANCOUVER (NEWS 1130) – With record-breaking housing demand sweeping the province, and predictions prices will jump another 20 per cent in BC (25 per cent in Metro Vancouver) by the end of the year, a real estate analyst believes Ottawa would have to take some drastic measures if it tried to step in and moderate the white-hot market in Vancouver.
Yesterday, the Paris-based Organisation for Economic Co-operation and Development (OECD) added to the growing chorus of experts, economists and executives calling for more government action to slow down “unsustainable price growth” in markets like Vancouver.
“An extreme measure would be for the Canada Mortgage and Housing Corporation to stop insuring mortgages or limit the number of mortgages it insures in particular markets that are deemed risky,’ says Professor Thomas Davidoff with the Sauder School of Business at UBC.
“They could also increase mortgage premiums in markets they deem to be at risk, such as Toronto and Vancouver where prices may continue to rise but are also at risk of steep price declines,” he tells NEWS 1130.
In February, the CMHC did increase the minimum requirement for a down payment on homes over $500,000, but Davidoff says it is difficult to measure the impact of the move.
“It’s hard to know because at this point, most of us believe that very strong demand from overseas is a critical driver of housing prices in Vancouver. We don’t know what would have happened had foreign demand stayed constant,” he says.
“If you have mortgage rules that weaken local demand but don’t do anything to foreign demand, it’s not clear what effect that would have on prices, on average. You might say that but for the foreign demand, prices would have fallen, which suggests foreign demand is quite strong.”
Davidoff believes if any level of government is serious about addressing long term risks in the Vancouver market, they have to deal with zoning policies and taxes that are creating an environment reliant on investment from wealthy overseas investors.
“In the long run, it will probably continue growing but over short horizons, it will fluctuate quite a lot, exposing the market to a lot of volatility.”
Ottawa could take drastic measures to slow the housing market: analyst - NEWS 1130
............................
Looks like Vancouver, BC and Toronto are ready for a financial meltdown..
Canadian Bank Chiefs Put Mansions On Sale After Warnings
BC Province Government looking at new tax on empty homes, transfer taxes..
Vancouver mulling new tax for empty homes
Looking like the US Housing crisis is on the horizon for BC and Ontario..
B00M B00M !
VANCOUVER (NEWS 1130) – With record-breaking housing demand sweeping the province, and predictions prices will jump another 20 per cent in BC (25 per cent in Metro Vancouver) by the end of the year, a real estate analyst believes Ottawa would have to take some drastic measures if it tried to step in and moderate the white-hot market in Vancouver.
Yesterday, the Paris-based Organisation for Economic Co-operation and Development (OECD) added to the growing chorus of experts, economists and executives calling for more government action to slow down “unsustainable price growth” in markets like Vancouver.
“An extreme measure would be for the Canada Mortgage and Housing Corporation to stop insuring mortgages or limit the number of mortgages it insures in particular markets that are deemed risky,’ says Professor Thomas Davidoff with the Sauder School of Business at UBC.
“They could also increase mortgage premiums in markets they deem to be at risk, such as Toronto and Vancouver where prices may continue to rise but are also at risk of steep price declines,” he tells NEWS 1130.
In February, the CMHC did increase the minimum requirement for a down payment on homes over $500,000, but Davidoff says it is difficult to measure the impact of the move.
“It’s hard to know because at this point, most of us believe that very strong demand from overseas is a critical driver of housing prices in Vancouver. We don’t know what would have happened had foreign demand stayed constant,” he says.
“If you have mortgage rules that weaken local demand but don’t do anything to foreign demand, it’s not clear what effect that would have on prices, on average. You might say that but for the foreign demand, prices would have fallen, which suggests foreign demand is quite strong.”
Davidoff believes if any level of government is serious about addressing long term risks in the Vancouver market, they have to deal with zoning policies and taxes that are creating an environment reliant on investment from wealthy overseas investors.
“In the long run, it will probably continue growing but over short horizons, it will fluctuate quite a lot, exposing the market to a lot of volatility.”
Ottawa could take drastic measures to slow the housing market: analyst - NEWS 1130
............................
Looks like Vancouver, BC and Toronto are ready for a financial meltdown..
Canadian Bank Chiefs Put Mansions On Sale After Warnings
BC Province Government looking at new tax on empty homes, transfer taxes..
Vancouver mulling new tax for empty homes
Looking like the US Housing crisis is on the horizon for BC and Ontario..
B00M B00M !
