ING Direct President Concerned About Housing Market
Peter Aceto, President of ING Direct, told the Toronto Star that he’s worried about Canada’s real estate market.
He made several candid statements in an interview Thursday, including these:
"Canadians are…paying their homes off slower and slower, and the concern for me is that they are buying more house than they can really afford."
“"You have situations in some markets such as Toronto where people are making multiple offers for homes, they are paying thousands more and waiving conditions. It gives me concern they may not be thinking rationally…”
"It's almost as if Torontonians feel very concerned they are missing something with such low rates…”
“Can (homeowners) afford to pay for their mortgage five years from now, when interest rates go back up?"
"Canadians have been proud internally that we're very different than the Americans in the way we behave in terms of our spending habits and the way we deal with credit. But over time we have become a lot closer than we think,"
Aceto says over 50% of this year’s Canadian mortgages had amortizations over 25 years. The Star reports that ING Direct staff have been told to try and steer clients away from 35-year amortizations when possible.
Aceto says, "We shouldn't be interested in just selling mortgages to get our numbers up for the next quarter.”