![\"\"](\"https:\/\/i0.wp.com\/www.olgaouspenski.net\/blogwp1\/wp-content\/uploads\/2012\/10\/Changes-in-Insured-Mortgage-Lending-Rules.jpg\" "\\"Changes")
<\/a><\/p>\n\u2022\u00a0The Department of Finance recently implemented tighter mortgage insurance rules to help take some\u00a0of steam out of the Canadian housing market and to curb households from taking on too much debt\u00a0during a continued low interest rate environment.
\n\u2022 Analysis shows that past regulatory tightening led to a significant\u00a0permanent drop in housing demand. However, while home prices took an immediate hit following\u00a0the rule changes, they bounced back within two to three quarters and continued to grow faster than\u00a0underlying economic fundamentals. The dampening effect on household credit growth was more\u00a0notable and sustained.
\n\u2022 The changes implemented on July 9th may have more of a bite as they will hit a larger segment of\u00a0the housing market and lead to a larger deterioration in affordability than past rule changes, particularly for first time homebuyers. Overall we expect the new rules to shave 5 percentage points off\u00a0sales and 3 percentage points off prices over the rest of 2012 and early 2013 and reduce about 1\u00a0percentage point off credit growth.<\/p>\n
<\/p>\n <\/p>\n Source :\u00a0http:\/\/www.td.com\/document\/PDF\/economics\/special\/dp0912_mortgage_rules.pdf<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" TIGHTER MORTGAGE RULES TO COOL DEBT GROWTH, BUT HIGHER RATES ULTIMATELY REQUIRED \u2022\u00a0The Department of Finance recently implemented tighter mortgage insurance rules to help take some\u00a0of steam out of the Canadian housing market and to curb households from taking on too much debt\u00a0during a continued low interest rate environment. \u2022 Analysis shows that past regulatory … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":387,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[61,58,59],"tags":[45,41,11,17,14,48,12],"class_list":["post-385","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-info","category-real-estate-2","category-tendances","tag-five-year-fixed","tag-frais-dinteret","tag-marche-immobilier","tag-mortgage-rate","tag-news","tag-statistique","tag-taux-hypothecaire"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.olgaouspenski.net\/blogwp1\/wp-content\/uploads\/2012\/10\/Impact-of-Allowable-Amortization-Periods-on-Mortgage-Payments.jpg?fit=893%2C399&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p1UEHj-6d","_links":{"self":[{"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/posts\/385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/comments?post=385"}],"version-history":[{"count":4,"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/posts\/385\/revisions"}],"predecessor-version":[{"id":390,"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/posts\/385\/revisions\/390"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/media\/387"}],"wp:attachment":[{"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/media?parent=385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/categories?post=385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.olgaouspenski.net\/blogwp1\/wp-json\/wp\/v2\/tags?post=385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a>
\n\u2022 However, new guidelines will only go part of the way in unwinding the imbalances developed in the\u00a0Canadian housing market. As long as interest rates remain at their current low levels, households\u00a0still have a strong incentive to borrow and the overvaluation in the housing market will persist. Ultimately, interest rate increases by the Bank of Canada are needed to ensure sustainable growth in\u00a0the Canadian housing market.<\/p>\n