The National Housing Strategy does not measure up, says the Parliamentary Budget Officer.
Housing
A Wealthy Person’s Housing Strategy
Canada’s housing strategy is rigged to favour those with big homes and wealth. We unfortunately argue about the small amounts that are expended on those who really need help, missing the real point. I applaud those who call the government to account. Today a blog post at policynote.ca details how the most wealthy have benefited […]
Mortgage Maze
A recent item in the Globe and Mail clearly itemizes the unnecessary complexity regulators have introduced into the mortgage marketplace. The OSFI B20 guideline succeeds in making mortgage qualification, rate comparison, and prepayment penalty regimes less borrower friendly. The new guideline may ‘protect consumers’ from themselves and protect banks from excessive risk taking. However, we […]
OSFI puts it to Provinces?
The recently announced B-20 Guideline from the Office of the Superintendent of Financial Institutions (OSFI) places new income qualifications on borrowers when obtaining a conventional mortgage at federally-regulated financial institutions (FRFI), mostly banks. Borrowers will have to prove they can afford a loan at @200bp above the quoted rate. The tougher debt servicing test is […]
Debt and Housing Bubbles
More commentary has come out on the exceptional levels of household debt in Canada. These sometimes speak directly to the issue, such as described in the Borrowing Binge in the Vancouver Sun, or as a negative outlook provided by Moody’s when assessing the exposure of Canada’s banks. The latter makes explicit references the level of […]
Trimming Excessive Home Ownership Subsidies
While the cost of housing has prompted much debate, too little attention is on the heavy subsidies granted to residential real estate investment and the way in which these subsidies have caused price inflation. Fortunately, the Government of Canada mortgage insurance program is being scaled back. The restrictions introduced late in 2016 are ‘cooling the […]
A Real Estate Fueled Boom
Recently, economist Michael Hudson visited Vancouver to speak on the issue of housing and the ‘Junk Economics‘ (the title of his most recent book) behind our apparent good times. The substance of his observations is presented in a readable article in this week’s Common Ground. Hudson spoke at an event sponsored by the Centre For […]
Many Losing Ground and Hope
At the recent Central 1 conference and AGM I listened to economists provide updates and, somehow, the growth in inequality got little attention. Although Helmut Pastrick, the Chief Economist at C1, did provide a recent analysis showing the job growth in BC (and Ontario), but he did not observe that it has been where wages […]
Mortgage Insurance Paradox
Canada Mortgage and Housing Corporation (“CMHC”) has created what could be called a mortgage insurance empire. With a book totaling $526B in 2015, that book alone was larger than Canada’s fifth largest bank and exceeds 1/3 the total all outstanding residential mortgages in Canada. This coverage is sold through banks, credit unions and other lenders. […]
Banks and Bubbles
A couple of days ago there was a good piece in Canadian Business. The facts are laid out that Big Bank growth and profits track quite closely with our real estate and debt bubbles. Writer Kevin Carmichael provocatively critiques the Big Banks for their addiction to residential mortgages and their complicity in the two blights […]