Canadian house prices to rise even with tighter mortgage rules
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Canada’s Office of the Superintendent of Financial Institutions is proposing, among other changes, to reset the minimum floor for a qualifying rate for uninsured mortgages effective June 1.
There has been an unexpected surge in demand for detached homes, and prices, across most of the country and concerns about affordability. Among the factors seen as contributing to the market’s strength are ultra low interest rates and lower than normal listings, both pandemic-related.
The OFSI’s proposals are expected to have a muted impact on soaring housing demand and prices, though potentially “soothe the Bank of Canada’s growing concerns about the negative consequences of low interest rates”, according to Capital Economics’ Stephen Brown.