Lender executive weighs in on housing policy suggestion

Lender executive weighs in on housing policy suggestion

Lender executive weighs in on housing policy suggestion One industry veteran cautions the government to consider the wide-reaching ramifications of attempting to temper rising prices, amid growing calls for it to do so.
 
“Complex markets, like the Canadian areal estate market, are difficult to intervene and tinker with,” Chris Whyte, Home Trust’s newly appointed COO, told MortgageBrokerNews.ca. "I would be a bit concerned about how effective any attempt to curb the market could be.
 
“I’ve yet to see any market [outside Canada] that has intervened in a way that has satisfied all parties.”
 
Whyte’s comment was in response to BMO Economist Sal Guatieri’s suggestion that investment speculators – along with foreign investors – are a major driving force behind inflated home prices in Toronto and Vancouver.
 
And that the government should step in to manage that influence.
 
“The sooner that governments can provide a clearer picture of how much speculative investment is driving these price moves and take meaningful action to curb the excesses, the better the chance of avoiding a messy outcome,” Guatieri said in a recent research note.
 
Whyte, however, notes speculative investment is a natural result of solid housing markets.
 
“Just logically, any market that’s rising quickly attracts investors. If you’re seeing a market where things are increasing 5-10-15-20%, people want to participate in that,” he said. “I think the issue around the market in Canada is more complex than people want to give credit to.

“Is investment part of it? Sure.”
 
He also noted that recent government intervention may have had little impact on the overall housing industry.
 
“I think there are some things you can do around the edges; CMHC has done that, the government has done that,” Whyte said. “Whether or not those are ultimately effective, I’m not sure. Some say they didn’t intervene enough.
 
“I think more intrusive interventions [could have a negative impact].”
5 Comments
  • Jerry Quigley 2016-06-09 9:42:41 AM
    How about the cities of Toronto & Vancouver put a special & temporary annual property tax of 15% of the purchase price of any residential property over $750,000?
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  • David 2016-06-09 10:15:41 AM
    Imposed more fee, tax or whatever = adding cost to the purchase of a property = the added cost will be part of the selling price = the price will be higher

    If very high fee, tax or etc imposed, market will become very quiet but doesn't mean price will go down, the Realtor industry will die down.

    This can be seen in Hong Kong in the pass 6 years, Govt put high transfer tax and also extra tax for non resident. Result is market became very quiet but price not going down but keep gone up bit by bit.
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  • Marcy Berg 2016-06-09 11:02:58 AM
    Does anyone think that our youth with live with the hopelessness of home ownership? they vote too. I think all lenders should be concerned about the government making moves to curb the housing market but that doesn't make it good for everyone. The government will have to think about their next move very carefully. It would seem a simple thing to do is make a mandatory 5 day period between offers and waivers. That would help a bit. right now we have a buyers running around buying houses they may not buy and prices they might not have paid just to get into the market. So many are taking great risks and buying without conditions. I think it's important that we make sure younger people have a strong future and not see them underwater with mortgages. I would be in favour of a dispassionate discussion amongst all industry leaders.
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