By Warren McNeil

Source Reuters Flaherty sees no housing bubble at present

The government doesn’t see any evidence right now that we are in a housing bubble but is just watching and monitoring along with the Bank of Canada.

No Housing bubble in Canada

He is not as concerned about housing prices as much as his concern about consumer debt. His concern is also with people being able to afford their mortgage if and when the interest rates go up.

“I’m more concerned about affordability (of mortgages) and people not being lulled into a false sense of security, taking out relatively low interest-rate mortgages, when we all know that the mortgages rates have only one way to go over time — and that’s up,” he said.

The government is prepared to tighten standards by raising the the required downpayment from 5% and by reducing the max  amortization period from 35 years. By reducing the amortization period, the payments would be higher and consumers might decide to hold off buying if they can’t afford it.

As of right now there is no plan to make any changes at all. Interest rates are still low, people can still get 35 year amortization and the downpayment is the minimum of 5%.

“I don’t think people should overreact. This isn’t something the government is going to move on in the short term,” he said.

So in other words, if you are a buyer who has a good job, 5% to put down and want to buy a home; Then now is a terric time to buy. The Kitchener-Waterloo real estate market is doing very well and we expect the year 2010 to be a record-breaking year for sales.

Thanks for reading!

Warren & Melanie McNeil | Sales Representatives, Team McNeil
Re/Max Twin City Realty, Brokerage ( 519.579.4110 
8 www.TeamMcneil.com, www.LoftStyle.ca, www.ClickThatHouse.com  
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