Stricter mortgage rules could be in place by January 2018

Wednesday, October 4, 2017Norm Rousseauposted in Buyers, Sellers

By the end of October 2017 we should have a clear idea of proposed changes to mortgage lending regulations with updated B-20 rules implemented within two to three months.
Speaking at an event in Toronto, OSFI superintendent Jeremy Rudin said Tuesday that much of what will become the updated regulations will be what the regulator set out in July which includes a stress test for all uninsured mortgages.iStock_document-paperwork-reading-signing-verifying-check_000028626732_Small
He told the Economic Club of Canada audience that the Office of the Superintendent of Financial Institutions is concerned about the high levels of consumer debt and high real estate prices in some markets.
"We are not waiting to see those risks crystallize in rising arrears and defaults before we act," Mr Rudin stated.
The superintendent says that it has never been more important for mortgage lending underwriting criteria to be strong and that the system needs a “certain integrity.”
Mr Rudin said that although there is a risk of more borrowers using unregulated lenders for mortgages that did not preclude OSFI from taking necessary steps within its mandate.

September 2017 Housing Market Facts

Tuesday, October 3, 2017Norm Rousseauposted in CREB Market Statistics


Both the North and Southeast have reached record high inventory levels for September. This is likely related to the new construction activity as these districts are in areas with significant amounts of new housing projects. Despite city wide easing, third-quarter sales improved in the East, West, South and Southeast areas of the City.Capture September detached prices eased in most districts compared to last year. However, on a year-to-date basis, only the Northeast, South and East districts have prices just below last year’s levels. City-wide inventory gains occurred across all price ranges. The gains were broader based in the detached and apartment sectors. However, most the gains in the attached sector occurred in the $300,000 - $399,999 range. For the second month in a row attached prices remained relatively unchanged at $336,000, keeping year-to-date figures just below last year’s levels. However, yearly price changes do vary between the semi-detached product, which remains four per cent higher than 2016. The row product is nearly four per cent lower than last year’s levels.

September 2017 CREB Stats

Tuesday, October 3, 2017Norm Rousseauposted in CREB Market Statistics

The Big Picture Inventory increases and sales drop in September, but overall sales for the year remain higher than last year.

September 2017

City of Calgary, October 2, 2017 – Strong gains in the first-half of 2017 has put the Calgary year-to-date sales at seven per cent above last years’ levels and 11 per cent below long-term averages, but challenges remain with easing sales and rising new listings.Capture

Inventories rose across all property types to 6,861 units, while both apartment and attached-style properties saw the highest inventory on record for the month of September.

“The recent rise in inventories is preventing further price recovery as sales activity has moderated over recent months. This does not come as a surprise as sales activity is expected to remain modest by historical standards until more substantial economic improvements take hold,” said CREB® chief economist AnnMarie Lurie.

“Some may consider this a setback, but it is important to note that recent movements are balancing out the higher than expected gains that occurred in the first-half of the year.”

New listings in September totaled 3,266 units, a year-over-year gain of nearly 10 per cent.

“There are several factors influencing new listings. Given the falling prices over the past two years, some sellers were waiting for market conditions to improve prior to listing their homes. More stability in the market has prompted many of those sellers to no longer delay their listing decision,” said CREB® president David P. Brown.

“In some segments, rising new home inventories are also impacting total housing supply. Ultimately, prices are affected. However, this inventory also opens up opportunity for buyers to step up into a home that was financially unattainable.”

As of September, unadjusted benchmark prices totaled $441,500. This is 0.2 per cent below last month, but nearly one per cent above last year. Downward price pressure this month occurred across most product types. However, year-to-date benchmark prices in the detached sector remain comparable to last year.

Prices in the detached sector remain relatively stable compared to last year. Condominium apartment prices remain four per cent below 2016 levels and twelve per cent below 2014 highs. This sector continues to struggle with price declines resulting from excess supply as months of supply pushed above eight months.

CREB Stats August 2017

Monday, September 4, 2017Norm Rousseauposted in CREB Market Statistics

City of Calgary, September 1, 2017 – Sales posted a modest gain in August, but a rise in new listings kept inventory levels elevated.

Inventories totaled 6,624 units, where over half were comprised of attached and apartment style properties. While inventories were 16 per cent higher than August 2016 levels, the slight rise in sales prevented further gains in the months of-supply, which remain just above four months.Capture

“Employment growth is contributing to the stability in sales activity, but it is not enough to meet the recent rise in listings and make a substantial dent in inventory levels,” said CREB® chief economist Ann-Marie Lurie.

“Unemployment rates remain elevated and job growth is mostly occurring outside the energy sector, slowing the recovery process. Broader economic improvements will be required prior to it translating into substantial improvements in the housing market.”

Further proof of mortgage rule impact

Monday, August 28, 2017Norm Rousseauposted in General

News by REP28 Aug 2017

Finance Minister Bill Morneau has admitted last year’s mortgage rule changes aimed at cooling the housing market have had the intended effect.
“Preliminary data received since the government implemented its most recent adjustments to mortgage rules in October, 2016, suggests that the rule changes are having their intended effect,” Morneau said in a letter to the finance committee, per the Globe and Mail. “A decline in the share of new insured loans issued to highly-indebted borrowers suggests that the quality of credit is improving in the high-ratio mortgage market.184121986
“This development helps to ensure that Canadians are taking on mortgages that they can afford.”
Indeed, a recent report from TransUnion suggested mortgage originations have been impacted by last year’s rules, which included a mortgage stress test.
The agency reported a 10.4% decline in origination volumes in Q1 2017 compared to Q1 2016.
That included a 12% drop in prime mortgages and a 5% decline for “super” prime consumers.

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