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Economist Roundtable Takeaways

CAAMP’s Economic Roundtable on Monday covered a gamut of mortgage issues — from rate projections to regional housing performance to lending regulations.

Sharing their opinions were the following:

  • Warren Jestin, Senior Vice-President & Chief Economist, Scotiabank
  • Sebastien Lavoie, Assistant Chief Economist, Laurentian Bank Securities
  • Stefane Marion, Chief Economist and Strategist, National Bank of Canada

Here are the top 10 sound bites from that session:

  1. “(As far as financial institutions are concerned, when it comes to significant) mortgage growth on balance sheet…that game is over.”—Jestin
  2. “You get worried if you’re talking a 200-250 bps (rate) increase, but we simply don’t see that in the cards.”—Jestin
  3. “If the 5-year yield in Germany is 1/4 point, it can’t be 5% here.”—Lavoie
  4. “My terminal rate for the Bank of Canada overnight rate is 2% (just 100 bps above today).”—Marion
  5. “Economic forecasts can be hazardous to your wealth.”—Jestin
  6. “(Ottawa) could be open to more macro prudential measures, like increasing the down payment…Household indebtedness is still a concern for the Bank of Canada.”—Marion  [While a down payment change is possible, he says it wouldn’t happen “until after the election.”]
  7. (Will we see a change in amortization?) “No.”—Marion 
  8. “47% of household formation is taking place in Alberta.”—Marion
  9. “Debt divided by disposable income is misleading (as an indicator)…To the extent that your homeownership rate is moving up, your debt-to-income ratio will go up…The home ownership rate will start to level off.”—Marion
  10. “One of these days the 28-year-olds living in basements and playing video games will get out and buy a home.”—Jestin