Toronto, Ontario (PRWEB) November 29, 2012
According to Rob McLister of the Canadian Mortgage Trends, the recent changes in Canadian mortgage policies from high-ratio mortgage rules and new OSFI restrictions to the latest securitization and insurance limits, BASEL III, and IFRS indicate the federal government’s move to nip out some potential home buyers from the market. But what would happen and how much is a question that looms in the minds of many. Marcus Arkan, CEO of Syndicate Mortgages, shares his views regarding the ramifications of such a decision by the government.
Stringent mortgage lending policies will have a significant impact on economic growth. The Canadian statistics already reveal a fall in GDP in August, the first ever since February and a 15% decline in year-over-year home sales. Mr. Marcus Arkan, a leading mortgage broker, feels that although there is no reason to panic but the future of deceleration in the market and its impact on the Canadian economy is unknown.
According to Canada Mortgage and Housing Corporation (CMHC), Canada’s economy relies heavily on real estate activity as evident from its quick recovery from the global economic crisis as compared to other nations. One in five GDP dollars come from house-related spending. Housing-related consumption and investment totals more or less $330 billion (CMHC). A $1 rise in the price of their house increases a consumer’s expenditures by 5.7 cents, greater than the same increase in stock portfolios (Bank of Canada). More than 1.35 million direct and indirect jobs (about 8% of the total Canadian employment) are created as a result of housing activities (Canadian Association of Accredited Mortgage Professionals). This shows how much Canada is dependent on the housing industry.
According to the Canadian Real Estate Association, the new mortgage policies have caused a decline in home sales by almost 9% in August, the largest annual drop since April 2011,. Arkan highlights the move will most likely have the greatest impact on first-time buyers looking for mid-priced homes because of changes in the amortization period.
Finance Minister Jim Flaherty refers to the move as a ‘judgment call’ that is projected to gradually decrease home prices and stop Canadians from stacking up too much debt. “I hope that the policymakers know what they are doing with the housing market and have made calculated moves. How much correction the previously inflated home prices would face? The unknowns are still immeasurable”, said Marcus Arkan, CEO of Syndicate Mortgages.
To know more about the current mortgages being offered, visit the Syndicate Mortgages website.
About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada. For contact, please use the following details.
Syndicate Mortgages Inc.
Toll Free: (888) 646-1062