Story courtesy of the Financial Post

Canada’s housing market is expected to cool off this year and next, but isn’t at risk of falling victim to a U.S.-style foreclosure crisis anytime soon, according to a new report by debt-rating firm DBRS Ltd.
 
DBRS said in the report that Canada will continue to fare well in comparison to its neighbour to the south when the Canadian housing market corrects itself and interest rates are tightened. That is because lending practices here are much more sound than in the U.S.
 
“The likelihood of us having the kind of situation they had in the U.S. is extremely low,” said Jerry Marriott, managing director of structured finance at DBRS . “It’s a combination of the lending practices prior to the peak in 2007 — they were more restrained, so there were better underwriting practices in Canada. We also think there are a number of factors in the Canadian market which have lent themselves to more prudent lending.”
 
Those factors includes less aggressive lenders in the market, as well as systems designed to keep people paying their mortgages.
 
Mr. Marriott said that a cooling effect is gradually taking hold in the housing market as credit availability begins to tighten, and the HST factors into home buying decisions in Ontario and British Columbia.
 
That means there’s a greater likelihood this year that there will be a correction in housing prices rather than a continued increase. Mr. Marriott said the DBRS expects the market to cool throughout the year and continue to cool into 2011. That echoes analysts expectations, who also expect prices to drop as well. A recent report by TD Bank predicts prices will fall by 2.7% in 2011.
 
“If you add up the factors you would look at as to whether there’s going to be further price increases or the potential for a correction, we don’t see there’s a lot of factors supporting further price increases,” Mr. Marriott said. “But there are a number of factors that show there might be some moderation in housing prices.”
 
That may bode well for potential buyers after a report by CIBC this week said that on average, Canadian home prices are currently 14% over their “fair” value — that represents about 1.5 million homes, or 17% of all dwellings.
 
The report also highlights that Canadian households continue to have a particularly high level of debt, something that the DBRS notes is part of an ongoing trend. But it tempers that by adding that household debt is not as worrying as some analysts have suggested.
 
“We think the measurement of household leverage is subject to a fair amount of interpretation,” said Mr. Marriott.
 
For instance, the debt-to-disposable income shows Canadians are generally more indebted than Americans — however, the report outlines that this doesn’t reflect certain differences between the two countries that affect income, such as the fact that the U.S. has lower taxes but that Americans pay more money toward their health-care bills.
 
“At the end of 2009, Canadian households remained financially less leveraged by 10% to 45% compared with U.S. households,” the report said. Overall, after adjustments, Canada had a household liabilities-to-total gross income ratio of 116.8% at the end of 2009, while the United States’s ratio was 161.5%.
 
But Canadian household debt is growing faster. Household liabilities increased by 29.5% in Canada between 2007 and 2009. In the use, household debt grew just 5.3% during the same period.
 

Overall, mortgage lending in Canada reached $958.8 billion at the end of 2009. That’s more than double the $414.1 billion ten years ago. When including home equity lines of credit, outstanding mortgage-related credit was more than $1 trillion.

Financial Post


Read more: http://www.cbc.ca/fp/story/2010/05/28/3081970.html#ixzz0qwjO67re
Read full post
Categories:   | Abbeydale, Calgary Real Estate | Airdrie, Airdrie Real Estate | Alberta Housing Market | alberta housing market forecast 2012 | Alberta Housing Market, housing projections, cmhc | Alberta Housing Market, housing projections, cmhc, Calgary housing market, chestermere homes for sale | Alberta Land Tax | Android | April Market Update | April Market Updates for Calgary | Arbour Lake, Calgary Real Estate | Bowness, Calgary Real Estate | Bragg Creek, Bragg Creek Real Estate | Bridlewood, Calgary Real Estate | Calgary cash incentives | Calgary Economic Recovery | calgary economy | Calgary Economy, Calgary Housing Market, Calgary Real Estate, Chestermere Real Estate | Calgary Econonomy, Calgary Housing Market, Calgary Real Estate, Chestermere Real Estate | Calgary Grants | Calgary home market | Calgary Home Prices | Calgary home sales | Calgary Homes For Sale | Calgary Housing | Calgary Housing Market | Calgary Housing Market Outlook 2012 | calgary housing market statistics | Calgary Housing Market Update | Calgary Housing Stats | Calgary Housing Trend | Calgary Market Forecast | Calgary Market Outlook 2012 | Calgary Market Update | Calgary Open House | Calgary Properties | Calgary Real Estate | Calgary Real Estate Forecast | Calgary Real Estate Market | Calgary Real Estate Stats | Calgary Relocation | Canada Housing Market | Canada Mortgage Update | Cardston, Cardston Real Estate | Chestermere | Chestermere home for sale | Chestermere Homes | Chestermere Housing Market | Chestermere Open House | Chestermere Real Estate | Chestermere Real Estate Stats | Chestermere Realtor | Chestermere, Chestermere Real Estate | Cityscape, Calgary Real Estate | CMA, Market Analysis, Selling Price, Fair Market Value, Home Value, home price | CMHC | Connaught | Connaught, Calgary Real Estate | Country Hills | Country Hills, Calgary Real Estate | Coventry Hills, Calgary Real Estate | Deer Ridge, Calgary Real Estate | Deer Run, Calgary Real Estate | economic recovery | Economy | Evanston, Calgary Real Estate | Executive Home for Sale | Falconridge, Calgary Real Estate | Finance | First Time Home Buyers | foreclosure | Garrison Green | Garrison Green, Calgary Real Estate | Harvest Hills, Calgary Real Estate | Hawkwood, Calgary Real Estate | Hillhurst, Calgary Real Estate | Housing Trends | Inglewood, Calgary Real Estate | IPhone | January 2013 Market Update | Lakeside Home For Sale | Langdon | Langdon, Langdon Real Estate | Mahogany, Calgary Real Estate | Market Trends | Market Update | Market Value | Marlborough Park, Calgary Real Estate | Martindale, Calgary Real Estate | Mayland Heights, Calgary Real Estate | McKenzie Towne, Calgary Real Estate | MLS QR Code | MLS Search | MLS Search, Personal Real Estate Office, Real Estate, home search, compare homes, search for homes | Monterey Park, Calgary Real Estate | Mortgage | Mortgage Fraud | Mortgage Rates | Mortgage Registration | Mortgages | New Listing | Okotoks, Foothills Real Estate | Okotoks, Okotoks Real Estate | Open House | Pineridge, Calgary Real Estate | Pricing Your Home For Sale | QR Code | Real Estate | Real Estate App | Real Estate Forecast | Real Estate GPS QR Code | Real Estate Integrity | Real Estate QR Code | Real Estate, Chestermere Real Estate, Calgary, Buy, Sell, home | Recession | Redcarpet_Mountview, Calgary Real Estate | Rent vs Buy | Rental Property | Rental Property, Calgary Rental, First Time Home Buyers | Rosscarrock | Rosscarrock, Calgary Real Estate | Rural Rocky View MD, Rural Rocky View County Real Estate | Rural Rocky View MD, Rural Rocky View MD Real Estate | Rural Rocky View MD, Rural Rockyview County Real Estate | Rural Wheatland County, Rural Wheatland County Real Estate | Sage Hill, Calgary Real Estate | Secondary Suite | Sell Your Home | Selling Your Home | Shawnessy, Calgary Real Estate | Somerset | South Calgary, Calgary Real Estate | Southview, Calgary Real Estate | Spruce Cliff, Calgary Real Estate | Strathmore | Strathmore, Strathmore Real Estate | Suite | Sundance, Calgary Real Estate | Temple, Calgary Real Estate | Turtle Lake Real Estate | Tuscany, Calgary Real Estate | Victoria Park, Calgary Real Estate | Whitehorn | Whitehorn, Calgary Real Estate

Story courtesy of the Financial Post

Canada’s housing market is expected to cool off this year and next, but isn’t at risk of falling victim to a U.S.-style foreclosure crisis anytime soon, according to a new report by debt-rating firm DBRS Ltd.
 
DBRS said in the report that Canada will continue to fare well in comparison to its neighbour to the south when the Canadian housing market corrects itself and interest rates are tightened. That is because lending practices here are much more sound than in the U.S.
 
“The likelihood of us having the kind of situation they had in the U.S. is extremely low,” said Jerry Marriott, managing director of structured finance at DBRS . “It’s a combination of the lending practices prior to the peak in 2007 — they were more restrained, so there were better underwriting practices in Canada. We also think there are a number of factors in the Canadian market which have lent themselves to more prudent lending.”
 
Those factors includes less aggressive lenders in the market, as well as systems designed to keep people paying their mortgages.
 
Mr. Marriott said that a cooling effect is gradually taking hold in the housing market as credit availability begins to tighten, and the HST factors into home buying decisions in Ontario and British Columbia.
 
That means there’s a greater likelihood this year that there will be a correction in housing prices rather than a continued increase. Mr. Marriott said the DBRS expects the market to cool throughout the year and continue to cool into 2011. That echoes analysts expectations, who also expect prices to drop as well. A recent report by TD Bank predicts prices will fall by 2.7% in 2011.
 
“If you add up the factors you would look at as to whether there’s going to be further price increases or the potential for a correction, we don’t see there’s a lot of factors supporting further price increases,” Mr. Marriott said. “But there are a number of factors that show there might be some moderation in housing prices.”
 
That may bode well for potential buyers after a report by CIBC this week said that on average, Canadian home prices are currently 14% over their “fair” value — that represents about 1.5 million homes, or 17% of all dwellings.
 
The report also highlights that Canadian households continue to have a particularly high level of debt, something that the DBRS notes is part of an ongoing trend. But it tempers that by adding that household debt is not as worrying as some analysts have suggested.
 
“We think the measurement of household leverage is subject to a fair amount of interpretation,” said Mr. Marriott.
 
For instance, the debt-to-disposable income shows Canadians are generally more indebted than Americans — however, the report outlines that this doesn’t reflect certain differences between the two countries that affect income, such as the fact that the U.S. has lower taxes but that Americans pay more money toward their health-care bills.
 
“At the end of 2009, Canadian households remained financially less leveraged by 10% to 45% compared with U.S. households,” the report said. Overall, after adjustments, Canada had a household liabilities-to-total gross income ratio of 116.8% at the end of 2009, while the United States’s ratio was 161.5%.
 
But Canadian household debt is growing faster. Household liabilities increased by 29.5% in Canada between 2007 and 2009. In the use, household debt grew just 5.3% during the same period.
 

Overall, mortgage lending in Canada reached $958.8 billion at the end of 2009. That’s more than double the $414.1 billion ten years ago. When including home equity lines of credit, outstanding mortgage-related credit was more than $1 trillion.

Financial Post


Read more: http://www.cbc.ca/fp/story/2010/05/28/3081970.html#ixzz0qwjO67re
Read full post
Categories:   | Abbeydale, Calgary Real Estate | Airdrie, Airdrie Real Estate | Alberta Housing Market | alberta housing market forecast 2012 | Alberta Housing Market, housing projections, cmhc | Alberta Housing Market, housing projections, cmhc, Calgary housing market, chestermere homes for sale | Alberta Land Tax | Android | April Market Update | April Market Updates for Calgary | Arbour Lake, Calgary Real Estate | Bowness, Calgary Real Estate | Bragg Creek, Bragg Creek Real Estate | Bridlewood, Calgary Real Estate | Calgary cash incentives | Calgary Economic Recovery | calgary economy | Calgary Economy, Calgary Housing Market, Calgary Real Estate, Chestermere Real Estate | Calgary Econonomy, Calgary Housing Market, Calgary Real Estate, Chestermere Real Estate | Calgary Grants | Calgary home market | Calgary Home Prices | Calgary home sales | Calgary Homes For Sale | Calgary Housing | Calgary Housing Market | Calgary Housing Market Outlook 2012 | calgary housing market statistics | Calgary Housing Market Update | Calgary Housing Stats | Calgary Housing Trend | Calgary Market Forecast | Calgary Market Outlook 2012 | Calgary Market Update | Calgary Open House | Calgary Properties | Calgary Real Estate | Calgary Real Estate Forecast | Calgary Real Estate Market | Calgary Real Estate Stats | Calgary Relocation | Canada Housing Market | Canada Mortgage Update | Cardston, Cardston Real Estate | Chestermere | Chestermere home for sale | Chestermere Homes | Chestermere Housing Market | Chestermere Open House | Chestermere Real Estate | Chestermere Real Estate Stats | Chestermere Realtor | Chestermere, Chestermere Real Estate | Cityscape, Calgary Real Estate | CMA, Market Analysis, Selling Price, Fair Market Value, Home Value, home price | CMHC | Connaught | Connaught, Calgary Real Estate | Country Hills | Country Hills, Calgary Real Estate | Coventry Hills, Calgary Real Estate | Deer Ridge, Calgary Real Estate | Deer Run, Calgary Real Estate | economic recovery | Economy | Evanston, Calgary Real Estate | Executive Home for Sale | Falconridge, Calgary Real Estate | Finance | First Time Home Buyers | foreclosure | Garrison Green | Garrison Green, Calgary Real Estate | Harvest Hills, Calgary Real Estate | Hawkwood, Calgary Real Estate | Hillhurst, Calgary Real Estate | Housing Trends | Inglewood, Calgary Real Estate | IPhone | January 2013 Market Update | Lakeside Home For Sale | Langdon | Langdon, Langdon Real Estate | Mahogany, Calgary Real Estate | Market Trends | Market Update | Market Value | Marlborough Park, Calgary Real Estate | Martindale, Calgary Real Estate | Mayland Heights, Calgary Real Estate | McKenzie Towne, Calgary Real Estate | MLS QR Code | MLS Search | MLS Search, Personal Real Estate Office, Real Estate, home search, compare homes, search for homes | Monterey Park, Calgary Real Estate | Mortgage | Mortgage Fraud | Mortgage Rates | Mortgage Registration | Mortgages | New Listing | Okotoks, Foothills Real Estate | Okotoks, Okotoks Real Estate | Open House | Pineridge, Calgary Real Estate | Pricing Your Home For Sale | QR Code | Real Estate | Real Estate App | Real Estate Forecast | Real Estate GPS QR Code | Real Estate Integrity | Real Estate QR Code | Real Estate, Chestermere Real Estate, Calgary, Buy, Sell, home | Recession | Redcarpet_Mountview, Calgary Real Estate | Rent vs Buy | Rental Property | Rental Property, Calgary Rental, First Time Home Buyers | Rosscarrock | Rosscarrock, Calgary Real Estate | Rural Rocky View MD, Rural Rocky View County Real Estate | Rural Rocky View MD, Rural Rocky View MD Real Estate | Rural Rocky View MD, Rural Rockyview County Real Estate | Rural Wheatland County, Rural Wheatland County Real Estate | Sage Hill, Calgary Real Estate | Secondary Suite | Sell Your Home | Selling Your Home | Shawnessy, Calgary Real Estate | Somerset | South Calgary, Calgary Real Estate | Southview, Calgary Real Estate | Spruce Cliff, Calgary Real Estate | Strathmore | Strathmore, Strathmore Real Estate | Suite | Sundance, Calgary Real Estate | Temple, Calgary Real Estate | Turtle Lake Real Estate | Tuscany, Calgary Real Estate | Victoria Park, Calgary Real Estate | Whitehorn | Whitehorn, Calgary Real Estate
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