As anticipated banks are taking action to adapt the new OSFI guidelines. HELOC will soon be allowed only up to 65% of the asset value. RBC is reportedly taking action already. Other banks will follow soon.
In future how they will deal with loans like One Charge, Re-advancable or Collateral Charge remained to be seen. There are always some gray areas in those matters.
Housing Going Down:
This is a no brainer – when we are told that housing prices will remain flat – that actually means a down slide. It may happen by only few points but inflation adjustment will erode the present value of the property in future.
In its last report CMHC predicted a moderate housing market going into 2013. It forecast a very mild increase in average house price but average price never reflects the real price variation. If the data is skewed by a particular segment then the broad spectrum fluctuation is difficult to tell.
In another report OREA said that the prices fell in the major market and there is a slight slowdown in the national sales activity. It also pointed out that there have been fewer listings in the month of July.
It is not clear that if these are just seasonal effects or there have been some fundamental shift in the demand and supply mechanism of the housing market. To have a clear understanding of the causes and effects we have to wait a bit longer.