Call it a slowdown, soft-landing or a correction, some mortgage professionals are just glad 2012’s rough ride is nearly over and as one major bank puts it the industry is headed on a “sustainable path.”
“We didn’t see any of the doom-and-gloom scenarios that some quarters where talking about,” said James Laird, broker for True North Mortgage in Toronto. “Instead, we’re seeing a levelling off of the market that will continue well into 2013.”
“Market stability is good because big upswings and downswings are never good for the mortgage industry,” Laird said.
Stricter lending rules introduced this summer, riled many brokers as they saw traditional revenue streams dry up. But early this week, rating firm Standard and Poor’s gave Finance Minister Jim Flaherty’s strategy for slowing down the market a big thumbs up by reaffirming Canada’s triple –A rating.
On Tuesday, Scotiabank reported that while the U.S. housing activity was gearing up that of Canada was gearing down but said that lower home prices and sales activity weren’t all that bad.
“Canada’s national housing market is shifting towards a more sustainable path, though significant differences in regional conditions continue,” Adrienne Warren, Scotia’s senior economist, said in the bank’s Global Real Estate Trends report.
While the regulatory changes, including the lowering of maximum amortization period from 30 to 25 years, made it harder for many consumers to get into the market, the revamp appears to have not contributed to a sharp decline of the market, she said.
While the CAAMP leadership is set to talk to bureaucrats and politicians in Ottawa today to discuss how tighter mortgage and lending regimes have impacted the industry, some brokers believe the changes were needed.
“The rule changes were made because the Canadian housing market was extremely overheated,” said Paolo Di Petta, a broker with EQRON Mortgages in Toronto. “The move was warranted and prudent. It was much less devastating than an interest rate hike would have been because it keeps people who have already purchased in their homes.”