The one-two punch of this summer's mortgage rule and guideline changes may overwhelm the housing market, the president of CAAMP said during a national TV broadcast this week.
“The federal government introduced four set mortgage rule changes in June...we also saw some new underwriting guidelines from OSFI and also some changes by the CMHC,” said Jim Murphy, during an interview on the Business News Network. “It's the cumulative effect of all this that's having an impact on the housing market and on jobs.”
The dramatic turn in some markets suggest the government's measures may have been too aggressive, said Murphy, especially considering the market had already begun to apply its own brakes.
“In the last two months, the sale of new homes has been down, the resale of homes has slowed down in both Vancouver and Toronto...and in the case of Vancouver, prices have gone down,” Murphy said. “But two months does not make a trend...three or four months a trend and we are monitoring the situation.”
Still, CAAMP supports many of the government's steps, said Murphy, particularly those aimed at curbing mounting consumer debt load.
“We've shared some of those concerns over mounting debt and people using homes as an ATM,” Murphy said. “We supported some of the government's moves such as getting rid of the no-money down mortgages and 40-year amortization.”
But he said the government's actions have also shut out a lot of first time home buyers from the market and run the risk of chopping jobs in the housing industry.