There’s yet more indication brokers will be spared the shakeup bankers have been so desperate to achieve.
“I’m actually encouraged that the market itself is showing some correction,” Finance Minister Jim Flaherty said while visiting Alberta Thursday. “We’re not seeing so much of that in Toronto, but in Vancouver, yes. And overall we’ve seen some moderations, some softening in the residential market and I think that is a good thing.”
It’s also the thing encouraging the government to resist calls for tighter mortgage rules – specifically, banker calls, coming before, during and now after Flaherty’s budget speech last month.
The slowing B.C. market has eased concerns both in Ottawa and across the country that Canada’s housing market was headed for a severe correction as price growth outstripped consumer demand. That punishing reset hasn’t happened, said Flaherty, pointing instead to a more gradual, organized slowdown in price and volume growth.
The minister’s comments suggest that he has taken the idea of a 25-year amortization cap, down from the 30 years, off the table. Bank economists had also called for an increase in down payment requirements, increasing the minimum to 7- or 10-per cent.
Both suggestions were billed as a way of cutting record levels of household debt and slow down the consumer rush to buy homes.
While those changes seem unlikely at this juncture, the banks are still waiting on details around other plans announced in March, specifically, legislation for covered bonds, which will be administered by CMHC.
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