crazy news re: cmhc limit

[HaroldCrump]

if the government had left the old rules in place a lot of this would not have happened

You are missing the point.
The whole idea was to inflate the bubble.
Still is.
What makes you think the govt. wants to deflate the bubble?
Every since action is aimed that keeping the bubble inflated.

[Mall Guy]

Couple of articles from the other CMHC thread. Not many over there think the Gov't will raise the limit as there would be no point in changing the oversight of CMHC to the OSFI . . . check out the chart at the bottom of the Maclean's article . . .

http://www2.macleans.ca/2012/04/23/t...ousing-bubble/
http://business.financialpost.com/20...flaherty-says/

Other thread:

http://canadianmoneyforum.com/showth...eral-regulator

[Brenner]

this entire bubble could have been avoided if the government had not changed the housing rules 3-4 years ago

first the conservatives ( remember they are the ones who are supposed to be astute managers ) raised the amortization period from 25 years to 40 years --- someone must have thought it was a great idea !!!!! then they went further and were for a short time offering 0 down payment mortgages ( this only stopped because the american real estate market tanked just about the time the 0 mortgages were coming to Canada compliments of our fearless government)

so now they have been backtracking to 35 year amortization and now 30 years --- it should be back to 25 years and there should be no mortgages without at least 10% down --- forget 5% down mortgages --- toronto is crazy with multiple offers and all of this will end in tears and a market that will be destroyed for at least 5-10 years ---- if the government had left the old rules in place a lot of this would not have happened ---

I do find it funny that they portray their backtracking as proactive moves to prevent a crisis... you see this in a lot of articles these days where Flaherty claims he has already twice made moves to tighten mortgage rules and now its up to the banks! They just happen to leave out the fact they they are just undoing their own actions to loosen them.

Kinda telling about the state of journalism. I don't mind too much the ones that are clearly just pushing the news content, reporting the spin as its said. It's the so called opinion pieces that are bothersome. Its like they just take the new pieces, re-write it to make it appear as an opinion piece "analysis" and call it a day. No additional background checking, no actual thought. /end CBC rant.

[donaldmc]

I'm glad to know this news, it's very insightful so thanks a lot for sharing it. I hope to get more details and info here.

[donald]

This is such great news.lol

[CJOttawa]

If no one can get a loan for 600K then the price of houses won't be 600K. Unless you live in a area with lots of very rich people.

The only people who should be buying $600,000 homes are rich people.

[andrewf]

I was not happy when Flaherty/Harper was loosening lending standards, but I won't give him too much of a hard time when he starts moving back in the right direction. You have to reward politicians for doing the right thing, even if it's only after they've exhausted all the alternatives. There are plenty of other things to criticize them for other than fixing their previous mistakes.

[blin10]

I think they'll increase the limit to keep the bubble intact, but this alone will not save the RE market from falling.

that line been said for the past 7 years lol... people just bitter how they missed the run up..
let's say a 400k house 7 years ago is now worth 800k, and RE market falls right now and takes off 100-200k so the house is worth 600-700k, it will still be up... now whoever bought the house at the high 700-800k might feel some pain but no one knows what will happen

[andrewf]

An average decrease of 25% will probably hit the bubbliest markets hardest. I wouldn't be surprised to see parts of Vancouver drop 50% peak to trough.

[marina628]

My friend works in mortgages and she said most of the deals she is seeing have sold $20,000 -$30,000 over list price and rarely do the banks ask for an appraisal .If banks got the appraisals done many of the home owners would need to come up with more cash.My brother in law bought a condo in Alberta last month and the appraisal came in lower than his offer ,he had to get seller to drop price by $30,000 or he was walking .