According to a poll conducted by Reuters of different analysts, government of Canada will make it more difficult for a lot of home buyers to acquire mortgages in 2012 as it deals with a highly heated property market. The analysts, whose opinion was included in the poll, also said that that there will be no dramatic collapse in prices this year and prices will stabilize.
The poll reveals that when fourteen economists were asked that in their opinion, would Ottawa tighten mortgage rules in the coming 12 months, ten of them answered with yes. The analysts are expecting house prices to stall with an increase of 0.1 percent in the year till December 2012 and be the same in the coming year. This is a decline from 0.9 percent, year on year raise, last year in December 2011.
The results of this year’s poll were similar to another poll conducted by Reuters in January 2012, which revealed that a five year slide in U.S. housing prices will come to an end this year and will enter recovery in 2013. However, the recovery will be very weak.
If Jim Flaherty, the finance minister of the country, controls and tightens the pre-requisites for government backed mortgages, it will be the minister’s 4th intervention in real estate market in four years.
Finance Minister Flaherty might increase the minimum down payment to purchase a house from 5 percent, the current value, or reduce the amortization period to its maximum length of 30 years.
According to TD Securities economist Mazen Issa, there is some genuine concern that the country’s housing markets and houses have been overstretched. However, Mazen also said that without the presence of many triggers that will lead to a housing market decline, which won’t be coming forth till mid of next year, the underlying theme which seems obvious is gradual moderation.
The budget is expected to come out late in next month. Those who participated in the poll also see the Canadian housing market as being moderately overhauled, especially in Vancouver and Toronto.
