Federal move on housing. Did they go too far?

[Rue]

So what happens to people stuck with mortgages for their now devalued properties?

The same thing that would happen if interest rates go up or people lose jobs.

Also when you buy a house this notion it can never lose value, only gain is naïve.

If this law was not put in, we would have a bubble burst in Van and Tor.. This law is trying to avoid one but it may be too late

and I am not sure it it was needed outside Toronto and Van and would have been better handled at the provincial level.

.

I don't think Its unreasonable to tell someone with an income of 100,000 who puts 40 thou down on a down payment

they get a mortgage of 500,000 not 666,000. It was too high.

People are over-leveraged and it can create a domino effect of foreclosures.

This law is trying to prevent widespread foreclosures that are inevitable when its too easy to get a mortgage loan.

It could be many Canadians are now caught in debt spirals they can't get out of.

I am not sure it will harm people in other cities especially depressed ones. The so called economists say it won't and say

artificial housing markets are not a way to build an economy but instead burst it.

Edited October 4, 2016 by Rue

[Rue]

Would some of you ladies and gentlemen who oppose my posts just please take a moment and read what I have posted before commenting. I am not saying no actions were necessary because indeed Vancouver and Toronto/GTA had serious problems with skyrocketing housing prices so yes actions were necessary but what I am saying is that the issue was local and local governments should have taken action to cool down markets NOT at the federal level was a clear mistake because housing is already very slow in many municipalities even before these tough measures and it is now going to nose dive in Ottawa, Montreal,, Calgary, Edmonton, Saskatoon, Regina, Winnipeg and all small municipalities. That is 70% of the country will suffer now thanks to Feds and their miscalculated actions. To you since you live in BC or southern Ontario then those two regions are the entire Canada? Well not so. Many other regions have already slow market or had a balanced market and they will collapse now.

I think action was needed but your point it would have been more effective at the provincial level is a valid one because outside Toronto and Vancouver you are right other phenomena are transpiring. I think action was needed but at what level is a good question. I think you made a good effort to explain your position.

[CITIZEN_2015]

Nobody, repeat nobody, is suffering. If you can't afford the house, then you can't afford it - period. Overextending yourself based on very low interest rates is a big problem, no matter what part of the country you are in.

I used future tense and yes many bodies will when the economy dives into recession as a result of consumer spending eroding badly by those losing substantial equity on their investments.

[?Impact]

I used future tense and yes many bodies will when the economy dives into recession as a result of consumer spending eroding badly by those losing substantial equity on their investments.

Overextend yourselves, and the world will dive into a depression.

[CITIZEN_2015]

A summary of consequences of these rules which we should have had them only for the ywo regions of the country at the local level not Federal level for the reasons described before.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/do-ottawas-new-mortgage-rules-go-a-step-too-far/article32250068/

http://business.financialpost.com/personal-finance/mortgages-real-estate/realtors-say-millennials-are-the-real-losers-from-new-mortgage-rules

Edited October 10, 2016 by CITIZEN_2015

[msj]

Millennial will be the winners from these policies long term.

Heaven forbid if someone has to save a little bit more and buy less house than HGTV tells them is their right to own from the very start. 

Buying overpriced houses at 20+ year amortization periods has long term consequences. 

Not sure why people think it's is a good idea for people to be able to borrow whatever they want to buy whatever they want.

That does not help anyone and as a taxpayer I expect the government to protect my interests as a taxpayer rather than cheerlead a housing market with ever higher prices leading to ever higher debt loads among Canadians. 

 

 

[Argus]

On 10/4/2016 at 6:08 PM, Smallc said:

You first?

http://business.financialpost.com/personal-finance/mortgages-real-estate/cmhc-warns-of-strong-overvaluation-in-canadian-housing-markets-very-high-evidence-of-problematic-conditions-in-vancouver

You realize CMHC doesn't ensure houses over $1 m, right? None of those expensive houses and condos in Vancouver and TO will be affected by this.

When it comes to housing, government policy is a contradictory mess. One of the reasons for the CMHC’s creation was to encourage reluctant banks to make mortgages widely available. Now it’s doing the opposite.

The feds say they are worried about household debt, but continue the low-interest rate policy that encourages it. They fret about lack of economic growth, but are about to put the boots to the real estate sector, which has been delivering about half of our GDP gains.

http://ottawacitizen.com/opinion/columnists/denley-liberals-make-first-time-home-ownership-too-tough

Edited October 13, 2016 by Argus

[Smallc]

My link was being used to prove that it's more than just a Vancouver and Toronto problem.

[Argus]

12 minutes ago, Smallc said:

My link was being used to prove that it's more than just a Vancouver and Toronto problem.

None of the big, expensive homes anywhere will be impacted by this. As Denley points out, it will be young home buyers looking for their first home who will be most impacted. 

[Smallc]

The big expensive homes are arguably not the problem, as people of the usual means aren't buying them.

[Argus]

1 hour ago, Smallc said:

The big expensive homes are arguably not the problem, as people of the usual means aren't buying them.

It is the big expensive homes and, often the foreigners bidding them up which causes the next rank of houses to increase in price, and the ones below them, and the ones below them...

[eyeball]

Instead of the market dancing to the tune of its most powerful players we should institute some land reform and provide free or low cost lots to people who need them the most and see what that does to rationalize the market.  I live in a region where the lack of affordable housing is a huge issue. Transient seasonal workers resort to living in the woods as year round residents struggle to afford the means to stay.  There's no shortage of space - we're surrounded by thousands of square km of unoccupied land, even within areas that can be serviced by existing infrastructure.  

[bush_cheney2004]

8 minutes ago, eyeball said:

Instead of the market dancing to the tune of its most powerful players we should institute some land reform and provide free or low cost lots to people who need them the most and see what that does to rationalize the market.

 

Oh...so just take more native land...again.   At least that is consistent with the past.

Need a CMHC loan for that ?

 

Edited October 13, 2016 by bush_cheney2004

[eyeball]

Not at all, there are treaties where I live that have settled which lands can or cannot be made available for this - a very clear departure with the past in fact.

[bush_cheney2004]

1 minute ago, eyeball said:

Not at all, there are treaties where I live that have settled which lands can or cannot be made available for this - a very clear departure with the past in fact.

 

Indeed...I am sure that lot's of CMHC money finds its way to native mortgages.  

[Pateris]

Simply increasing mortgage rates to 7-8% would have the same effect.

[Topaz]

I don't know if any of u knew this but, I deal with the Royal, and we had paid off our mortgage but still had a credit line. The bank considers the credit  line a mortgage and  the life insurance on that loan is only good till I'm 70 and only if I die by accident!  My hubby and I always asked when he saw the loan officer if  we still have  life insurance on it and if I died it was covered. I was shocked  when I found out after by hubby died, when I had time to go over my finances.  I know we should have looked at it closer but we were dealing with my husband's  health problems.  I'm lucky because I'll have the money to pay off the loan, but it just  shows one has to look after their finances and  keep asking the right questions to the banks they are dealing with. Did any of u know that some  banks if not all, has this clause on their life insurances?

[cybercoma]

Even if you ask the right questions, you end up getting the wrong answers half the time. It's hard to find good service these days.