At the last announcement I said the Oct 19 Bank of Canada rate announcement would be uneventful and that is true, rates are not changing. Some of the events leading up to today were eventful for our industry. The announcement of the new mortgage rule changes two weeks ago will impact the housing market. Today the Bank of Canada confirmed that in their announcement that “the federal government’s new measures to promote stability in Canada’s housing market are likely to restrain residential investment while dampening household vulnerabilities.” What they really meant to say was we made some changes that will affect prospective homeowners but don’t have a clue how much this will impact the economy for Canada but it could be potentially bad.
Housing is the largest sector in the economy for 7 out of 10 provinces in Canada at the current time. By messing with the mortgage qualification rules the government is trying to reduce the tax payer risk and passing it on to the private sector. While in theory that seems good, there could be many unintended consequences. Let’s just hope the snowball rolled down the mountain doesn’t become an avalanche to the Canadian economy.
Here are some details on the recent mortgage rule changes.
Here is today’s Bank of Canada announcement:
The next Bank of Canada announcement is Wed, December 7.