Government Happy Housing Market Slow Down

(September 03, 2012 )

Earlier this summer, Finance Minister Jim Flaherty took action to tighten the mortgage and borrowing rules in hopes to cool the housing market. 

While Flaherty says it’s too early to gauge the effect the new rules are having on the real estate market, he welcomed indications of a recent cooling in the condo market, particularly in Vancouver and Toronto.

“That’s desirable,” said Flaherty.  “It’s better to have some softening in the market rather than have sudden movements.”

The minister twice referred to the possibility of the Bank of Canada rising interest rates in the future, but didn’t make any predictions as to when the hike would come.  He’s still concerned about the mortgage debt Canadians are carrying, but adds he thinks they’re getting the message that interest rates won’t stay low forever.

Last month, nearly half of the respondents in a national survey said they would have difficulty keeping up with mortgage or debt payments following a significant increase in interest rates.  Out of 1,000 Canadians randomly sampled via telephone, 48 per cent of them said a significant interest rake hike would pose a challenge to them.

Full article: Vancouver Sun