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Mortgage Broker News | 20 Dec 2013, 12:00 AM Agree 0
Bank economists are offering new forecasts for 2014 that may force brokers to check their optimism at the door – before entering the new year.
  • Lior, Mortgage Edge | 19 Dec 2013, 08:35 AM Agree 0
    As long as interest rates remain very low, the housing market will remain resilient. It is a very simple equation: consumers in the market, especially first time buyers, get concerned about missing the boat on low rates and get the down payment gifted from parents who are sitting on hundreds of thousands in home equity, which in turn keeps purchases going. The abundant supply of cheap money in the system empowers sellers and they feel more confident securing top dollar for their property. Given that we haven't really seen any dramatic decreases to housing prices around the GTA, it is safe to say that as long as rates remain low, the housing market will remain strong. This is not to say there are no headwinds. Once interest rates start to creep up and we return to more realistic pricing, then you can start worrying. This is not bound to happen in the immediate future. Yes, the Fed cut back QE by 10 billion a month but the US economy remains on steroids. It is unlikely that we will see a surge in interest rates for years to come. The only effect on the Canadian housing market will be even more stringent mortgage qualifying rules, and those may come a lot sooner than a 5-year fixed at 5%.
  • Ron Butler | 19 Dec 2013, 09:28 AM Agree 0
    I agree with almost everything Lior has said. There is a chance that there is simply too much upcoming hi-rise condo capacity and there will be some fallout in that space, but as far as single family properties are concerned, if rates stay low not much chance of price reversal next year.
  • Len Lane | 19 Dec 2013, 10:25 AM Agree 0
    Glad to see the banks being negative, we increased our business by 11% this year by digging deep and working every deal. Same will happen in 2014.
  • Paolo Di Petta | | 19 Dec 2013, 07:06 PM Agree 0
    I half agree with what Lior says - low rates doesn't mean the housing market will "stay resilient". It may appear resilient, but all it's doing is delaying the inevitable and making the problem much worse.

    Without the monstrous appreciation we have enjoyed until now, people are going to reach the limits of their "affordability". Debt to income is still high, and there isn't room on the refi-train to offload that debt anymore.

    Next year is definitely going to be interesting...
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