Mortgage brokers may have been ready to burn Jim Flaherty
in effigy last year when he tightened the mortgage rules, but yesterday’s announcement by the Prime Minister that Flaherty would remain as finance minister drew a grudging sigh of relief across the channel.
“I believe it is a good move by Harper because you wouldn’t want someone else to come in and undo all of the good that he has done,” says Murray Groen, broker and regional partner of The Groen Team, Mortgage Brokers Ottawa. “I am not saying everything he has done is perfect, but we have not experienced the housing bubble that many people feared, which, overall, is good for the housing market and mortgage brokers too.”
Brad Compton of Invis YourLowMortgage.ca agrees, and can’t foresee any more restrictions being placed on the mortgage industry.
“It’s hard to say. I think the damage has been done and even if Flaherty left his job, I can't see his successor reversing any of his decisions,” Compton told MortgageBrokerNews.ca. “As well, I think Flaherty's changes have had the desired affect and have cooled the Canadian housing market. I think he realizes any further restrictions would be unnecessary and would have further negative impact on the Canadian economy.”
Groen however, believes that the fluid nature of the global economy may spur more tinkering from the minister of finance.
“I think we may see tweaks in the mortgage industry more often than we did in the past,” he cautions. “With the speed economies change today and how much the global economy is intertwined we all need to be ready to adapt to change quickly. We know it is harder to get deals done now than it was but there is also not the same stability in the economy either, so it makes sense that it is harder to get them done.”
Groen cites recent history as proving his prediction true.
“Before 2004, how many major changes did we see in the mortgage qualifying rules?” he asks. “Not many, for decades the mortgage rules were very similar.”
Some of the first “tweaks” that Flaherty may apply may be for first-time homebuyers.
“I do see some room for improvement from today’s current mortgage rules, for example, allowing first-time home buyers to take on longer amortizations only on their first home purchase, versus the standard 25 year amortization for high ratio mortgages,” he says. “With incentives for first-time home buyers it can help maintain a stable growth in the real estate industry versus large peaks and valleys.”