The Bank of Nova Scotia, has taken steps into their own hands to cool of morgage lending in Toronto and Vancouver in a bid to curb rapidly increasing housing prices in those cities.
The Chief Executive Officer of the Bank of Nova Scotia Brian Porter announced that Nova Scotia will ease off mortgage lending in those cities.
“We’re a little concerned about housing prices in the greater Vancouver area and Toronto,” Porter, 58, said Tuesday in an interview on Bloomberg TV Canada. “We just took our foot off the gas the last couple quarters in terms of mortgage growth for the reasons I cited, in terms of Vancouver and Toronto.”
Homesales spiked 10.3 percent in April compared to the same time last year according to the Canadian Real Estate Association. In Vanvouver sales jumped 15% with an almost doubling increase in prices at 25% to an average of $844,800. Figures for Toronto are similar with prices rising 13% to $614,700 and sales at 7%.
“Generally, Canadians have a strong ability to self regulate and they’ve demonstrated that before,” Porter said.
Scotiabank recorded less growth in mortgage loans in the quater but Porter insists the quality of loans remain strong, and the bank remains confident in its current position.