Brokers beware of young buyers driving Audis

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Finance Minister Jim Flaherty said on CTV’s Question Period Sunday that he is monitoring the state of the housing market and is willing to intervene in the mortgage default insurance industry again if the need is felt.

“I talk to people in the condo business and I talk to people about houses and I keep track and we’ve tightened the rules four times on mortgage insurance and if we have to tighten them again, we will,” Flaherty said. “We have to be vigilant because that market is really important for jobs in Canada.”

However, in a bit of good news for brokers who fear the government setting up further roadblocks between their clients and potential mortgage approvals, the minister also intimated that he believes the past rule tampering has helped the market achieve a soft landing.

“What we’ve been trying to manage, to the extent that governments can manage, the housing market is a soft landing that, that gradual reduction,” Flaherty said. “We’ve seen that; we’ve seen some softening in the housing market, including the condo market.”

Concerning personal debt, Flaherty indicated a similarly improving outlook.

“When you look at the debt to net-worth: As long as the housing market remains relatively strong we don’t really have a debt issue,” the minister said. “I worried about it when it came to housing, certainly, because some of the house builders and condo builders were telling me about young people graduating and buying way more house than they needed and driving up in and Audi and all that general stuff … so that worried me but, as I say, that market is calming somewhat.

“So I’m less concerned than I was.”

And homebuyers may continue to be driven to buy now rather than later, with Flaherty admitting there will be “pressure” for the central bank to raise interest rates.

“The OECD and the IMF have both said to Canada we ought to let our interest rates go up a little bit,” Flaherty said. “So there will be some pressure there to let that happen.”


No bubble here

IMF: Make further cuts to government-backed mortgage insurance

  • Christopher on 2014-01-06 9:14:41 AM

    I remember a couple who were each making over 100K per year and as well as being up to their ears in debt, they didn't have a dime to put towards the purchase.

    Contrast that with a young fellow I had making less than a quarter of that having 50K saved from his own resources.

    Income is irrelevant compared to character.

  • Bonnie on 2014-01-06 9:38:57 AM

    Nice to know that Flaherty takes hearsay info from builders... to bad he wouldn't come down off his high horse and ask an average mortgage broker who works in the industry what the average Canadian's debt looks like.. and how we nolonger have the ability to help the debt ridden Canadians manage their debt..

  • Bryan Jaskolka on 2014-01-07 6:07:50 AM

    You had to know that even when coming out with positive statements, there would be those that jump all over him just because of his name and position. Give him a break. He can't win if he tells you what you don't know what to hear, and he can't win if he tells you what you do. This is purely politics on the side of brokers that slag him. Just because he didn't mention mortgage brokers means that he doesn't talk to them? There are all kinds of stats on the average mortgage in Canada, how many homeowners, how many still have mortgage debt, etc. Maybe those are the ones he's looking at.

  • George Paul Vlahakis on 2014-01-07 9:01:47 PM

    It's great to see the care in our government, for present times and future generations. In order not to, end up like other countries,
    proud to be Canadian...
    The George Paul Team

  • George Paul Vlahakis on 2014-01-07 9:02:06 PM

    It's great to see the care in our government, for present times and future generations. In order not to, end up like other countries,
    proud to be Canadian...
    The George Paul Team

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