No mater how much CMHC tries to convey the message that the effect of the new mortgage laws were fully intended, its lone voice (or op-ed) will be drowned in the the deluge of voices of developers, brokers, bankers etc using every broadcast medium available to them that the new rules will have unintended consequences.
I was forwarded this link where EVP of Empire Communities egged on by the news anchor says that new rules will lead to “drive until you qualify” and “look to the sky”. He also talked about Places to Grow Act and lack of serviced land leading to lack of affordability but since I blogged about latter two issues yesterday, so will not dwell on those.
What was not discussed at all was prospective first time buyers are taking on so much debt that they can not sustain a 2% increase in qualifying interest rates. Neither the anchor person nor the EVP were worried about consequence of such high indebtedness. But renting was treated as a stigma, living in a condominium as “settling for less”, sprawl was good and “drive until you qualify” was mentioned as a solution. In all the discussion, no hard data or evidence was presented. Moreover, the anchorperson kept on requesting “anecdotal” data as if it proves anything.
If “anecdotal” data point is the answer, I have one too. I asked a real estate broker what will be the consequences of the new mortgage rules. His reply, “Don’t you worry about it at all. You tell me which house you want to buy, I will arrange for you to qualify under the new rules.”
PS: One more day till CMHC releases its Housing Market Outlook and “red” alert report