Due to the expansion of housing affordability, there has been increasing concerns in the real estate markets, not only in Toronto and Vancouver leading to an issuance of the first ever “red” cautioning for the nation’s market.
Evan Siddall, President of the Federal Crown Corporation said; “CMHC has recently observed spillover effects from Vancouver and Toronto into nearby markets. These factors will be reflected in our forthcoming Housing Market Assessment on Oct. 26. They will cause us to issue our first “red” warning for the Canadian housing market as a whole. High levels of indebtedness coupled with elevated house prices are often followed by economic contractions. The conditions we now observe in Canada concern us.”
The endorsement of the new mortgage rules which are now in effect are now being used to help turn down the heat on the blazing housing markets. Evan mentioned the mortgage rules will cause the funding cost of lenders to increase and lower the chance of homebuyer borrowing. The rates of the mortgage are expected to have a modest increase.
In July, the evaluation of the quarterly marker assessed by CMHC as a proof of challenging factors in the country’s real estate market grew from weak to moderate, between April and July. The assessment of the market in Vancouver by CMHC went from modest to strong for obvious signs of problems, with others areas like Regina, Toronto, Calgary and Saskatoon following behind. The July report added Quebec City, Vancouver, Toronto and Saskatoon to the markets that are thought to be intensely overestimated.
Luckily, some of the markets in the country were at a safer side and not at any risk of being faced with problems. In places like Moncton, St John’s, Ottawa and Victoria, CMHC saw no sign or proof of challenging factors. The only market to go through a transition after being totally assessed was Ottawa.