Toronto, Ontario (PRWEB) March 05, 2013
Mortgage expert and CTO of Syndicate Mortgages, Marcus Arkan, has recently shared some important pointers from Financial Post’s article that suggest that IMF might demand an intervention in the housing market for the fifth time in a row. According to IMF’s annual report, the market is still overvalued and more rule changes might still be required.
Before sharing his views about the Financial Post’s report, Mr. Marcus Arkan shared some historical highlights about mortgage rule changes in Canada. Last year, Finance Minister Jim Flaherty introduced tighter mortgage rules as the Crown Corporation CHMC reached $576. With a cap of $600 imposed by the federal government, CMHC is further nearing its cap.
The IMF’s report was published not long after The Economist revealed figures that clearly point out that Canada’s housing market is still the world’s most overvalued despite clear signs of cooling. According to The Economist’s price-to-rents ratio, overvaluation in Canada stood at 78% back in January.
According to IMF’s report, Canada’s economy will get positive support from the U.S. economy as the latter starts to get back on the right track. However, the report still pointed out the housing sector as a source of vulnerability. IMF warns that there is still room for rate cuts and that is a constant risk, especially when CMHC is just about to hit the lid.
Mr. Marcus Arkan stated that the reason behind IMF’s alarming statement is the Bank of Canada’s rate that continues to remain at a record low of 1%. “As mortgage rules were tightened for the fourth time last year, almost everyone expected to see a rise in interest rates. The difference was slighter than expected. Bank of Canada’s record low rate may have facilitated early recovery but it came with long term after-effects,” Mr. Arkan added.
Despite indicating a possible need for intervention and proper action, the IMF report backed the fact that the housing sector is cooling and will continue to cool off. As a result, residential investments will not contribute as much to the economic growth as they have been in the past. “We have been talking about the mortgage industry’s contribution to the economy ever since the government imposed tighter rules,” Mr. Arkan added.
While Bank of Canada is still offering its stagnant historic low interest rates, you can find more information on current Canada mortgage rates at http://www.syndicatemortgages.com
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.
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