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Mortgage Broker News | 19 Nov 2014, 11:05 AM Agree 0
CAAMP’s chief economist, Will Dunning, postulates the mortgage credit growth rate in Canada will slow down in the near future, citing a number of contributing factors.
  • Layth Matthews | 19 Nov 2014, 01:30 PM Agree 0
    First, let me say that this economist is exceptional.

    I think it is really cool that the low interest rates have resulted in a slowing of mortgage credit. Ironically, that is very good news for many of us mortgage brokers. I'm just starting to see clients with room to refinance after the last several years of guideline tightening.

    The old fashioned ideal is to have a steady pace of mortgage credit expansion that is outpaced by home prices - so a steady pace of home equity expansion. i.e. housing as a good investment, which is what attracted me to this industry in the first place.

    The progression of housing prices from here is anybody's guess, but if the pace of "housing completions" is to slow, and rates will remain low, those are at least two positives.

    Now that we have weathered the storm of conservative guidelines we mortgage brokers will benefit from the steady accumulation of equity that shorter amortizations do provide - as long has home prices hold up.

    Longer-term

    The challenge will be the demographics. Our population growth is going to be slow and aging for the next 20 years. So we can look forward to ever increasing tax rates or we will be living in a very different society.

    Maybe we can find our way into driving economic growth through creativity vs. ever expanding consumption. Bring on the Gross National Happiness indicators! It's the rise of savings, quality vs. quantity, renovation, design, energy efficiency and anything that reduces the cost of living - and the taxable income required to support it.
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