Tuesday, July 28th17.1°C
26383
25998

High prices, low mortgage rates should be red flags on housing market: OSFI

OTTAWA - Canada's banking regulator is warning of the risks in the housing market from too high home prices and too low mortgage rates.

The second in command at the Office of the Superintendent of Financial Institutions says the current environment has made lending riskier today than it was a decade ago.

Deputy superintendent Mark Zelmer says in a speech to a housing conference in Toronto that while household credit has slowed, indebtedness will remain near record levels for some time and income growth is likely to be modest.

He says lenders, such as banks, are well capitalized at the moment but they cannot afford to relax, particularly as 60 per cent of bank lending is in the real estate market.

He says OSFI is trying to mitigate the risks but at the end of the day it is up to banks and mortgage insurers, such as the Canada Mortgage and Housing Corp., to make sure they are lending wisely.

He notes that the U.S. housing collapse demonstrated that when the tide turns on housing, high debt can act as a major drag on overall consumer spending and thus the economy as a whole.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14077.36+75.99
S&P CDNX586.97+5.25
DJIA17630.27+189.68
Nasdaq5089.21+49.43
S&P 5002093.25+25.61
CDN Dollar0.7721-0.0017
Gold1097.10+0.60
Oil48.19-0.22
Lumber259.50+3.40
Natural Gas2.84+0.02

 
Okanagan Companies
Pacific Safety0.175-0.005
Knighthawk0.010.00
QHR Technologies Inc1.37+0.01
Cantex0.05+0.00
Anavex Life Sciences0.78-0.13
Metalex Ventures0.06-0.01
Russel Metals18.35-1.10
Copper Mountain Mining0.82+0.02
Colorado Resources0.06+0.00
ReliaBrand Inc0.0045-0.0022
Sunrise Resources Ltd0.03+0.00
Mission Ready Services0.15+0.00
Decisive Dividend Corp2.60-0.10

 



26764

FEATURED Property
2223171133 - 3360 Old Okanagan Hwy
2 bedrooms 2 baths
$389,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Chasing ducks

Photo: Thinkstock.comWhen businessmen tell me that being low priced is the only way to stay in business, I am skeptical. Price is the simplest way for a consumer to compare and is overused as the basi...


Taking care of business

Photo: Thinkstock.comRetirement as a goal has changed a lot over the years. There was a time, it was the only goal. You’d punch the clock and count the years until you could stop punching that t...


Income from home equity

Photo: Thinkstock.comWhen retirement funds run low, seniors often ask if tapping into the equity in their home is the right way to retain financial independence. To see if this option might be a good ...

_








Member of BC Press Council


24843