In a recent report, CAAMP – which is trying to advocate proper research and considerations before implementing any new mortgage regulation – highlighted the following;
CAAMP estimated that 2 to 3% of Canadian home sales are investment properties.
Rising housing price raise consumer confidence.
A 10% rise in housing values might cause consumer spending to rise by 0.4%.
Average home value in Canada has increased by about 31% in actual dollars and about 19% in inflation-adjusted dollars, since 2006 census.
In another report it said;
CMHC is approaching its limit because the number of mortgage holders has grown, the population and housing units have increased and lenders have been insuring low risk mortgages, leveraging the government’s triple A credit rating for other bank business.
CMHC reported it paid out $454 million in the first nine months of 2011 which represents a 0.42 per cent default rate.
The housing industry is an engine of growth in Canada. If we impede its growth, we will add to unemployment and depress the economy.
It also stated that the some segments of the population will be hard hit by any mortgage regulation change. It also pointed out two most important risk factors in the market. Those risk factors are – unemployment and declining dousing prices. These risks have nothing to do with mortgage products themselves – according to the report.
The hard hit demographic segments will be –
- Self-employed.
- New Canadians.
- First time homebuyers.
