Spring Market Will See Effects From New Mortgage Rules
MCAN, a MIC and part owner of mortgage lender MCAP, says it has positioned itself for weakness in the housing market.
In its recent earnings report, MCAN writes, “…Regulatory changes have resulted in some downward pressure on (home) price points in our core markets…”
The company adds, “We expect the impact of these new regulations to become more pronounced into the spring of 2013.”
By the time the crucial spring homebuying season arrives, some expect the housing market slowdown to be well entrenched. But with interest rates held low, that’s far from certain, especially in places like Calgary. Price risk appears greatest in Vancouver and Toronto.
In a Reuters poll last week, the median economist’s forecast was that home prices would drop just 0.1% in 2013. Many, like TD economist Craig Alexander, expect more of a selloff, but he adds, “…A 10% correction sounds scary, in actual fact, this would be a healthy outcome.”
Either way, MCAN says it expects regulatory effects to continue “throughout 2013.” It has positioned itself by concentrating its “origination efforts on the entry level/affordable segment…in an effort to minimize the potential impacts of any weakness in home values.”
Sidebar: Ten out of 20 forecasters polled by Reuters said the Canadian government will tighten mortgage rules further in the next 12 months.
Rob McLister, CMT
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