Canadian government moves to address funding pressures at banks

In a move intended to “make loans more available and more affordable for Canadians and businesses,” Finance Minister Jim Flaherty announced today that the Canadian government would purchase $25 billion dollars worth of mortgages already insured by Canada Mortgage and Housing Corporation.

Flahrety insists that not a single Canadian bank is at risk of failing but that liquidity is the primary issue threatening the unimpeded flow of credit for Canadians.

“It is important to underline that Canada’s banks and other financial institutions are sound, well capitalized and less leveraged than their international peers,” he said.

Read the Globe and Mail story here

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

U.S. Federal Reserve to tighten lending rules

CNN: The Federal Reserve is expected to overhaul lending rules on Monday in an effort to prevent another mortgage crisis.

Good idea Ben! It would be foolhardy to encourage a second mortgage crisis while you’re busy dealing with the first one.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

Canadian government says, “No more 40-year mortgage for you!”

Canadian Government Says, “No More 40-year Mortgage for You!”In a move aimed at “protecting and strengthening the Canadian housing market,” the Government of Canada today announced pending adjustments to the policies of Canada Mortgage and Housing Corporation’s (CMHC) mortgage insurance programs.


At the top of the do not approve list is the 40-year mortgage. Effective October 15 of this year, CMHC, Canada’s housing agency won’t be insuring mortgages with amortization periods of more than 35 years.


Zero-down mortgages also meet their end when the new policies take effect. All CMHC insured mortgages will require a minimum down payment of 5%.


Other changes include the establishment of “consistent minimum credit score requirements” and the introduction on “new loan documentation standards.”


“Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-Style housing bubble developing in Canada.”


Prior to November of 2006 when CMHC relaxed its standards, the maximum amortization period allowed on a government insured mortgage was 25 years and a minimum down payment equal to 5% of the purchase price of the home was required. Introduced as “financial innovations,” zero-down mortgages and 40-year mortgages added fuel to a housing market that was already out of control in a number of Canadian cities.

Record house price increases followed in a number of Canadian cities including Saskatoon and Regina.

How do you see these changes affecting the Saskatoon real estate market?


Read the announcement here.

Read the Globe and Mail coverage here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

No major strains in Canadian housing markets: Scotiabank

According to a recent Real Estate Trends report issued by Scotiabank, Canada’s housing market is “moving towards more balance, but there won’t be a bust like we’ve seen in the U.S. housing markets.” Yet, there’s little question that the heat has come off in a fairly significant way. Resale activity across Canada has “fallen for four consecutive months and is running about 15% below last summer’s historic peaks,” the report’s author, economist Adrienne Warren said. The average resale price of a Canadian home registered its first “inflation adjusted” quarterly decline in seven years.


New home construction is also experiencing change as residential building permits saw “sharp declines” and inventories of unsold new homes are trending higher.


Warren goes on to say, “Canada’s recent record of price appreciation, averaging an annualized 10% from 2002 to 2007, was unsustainable, and a return to more historical norms is a welcome development.” In explaining her confidence that the market is unlikely to see major declines like it did following the last two Canadian housing booms, Warren makes the following points.


  • Home prices in Canada are not substantially overvalued
  • There is little evidence of widespread speculative home buying that often accompanies the later stages of a housing boom
  • Canada’s real estate market is not overbuilt
  • Canadian households are not overleveraged
  • Overall mortgage quality is still sound.

“From a regional perspective, the cooling in overall activity is most notable in many of Canada’s hottest urban housing markets in recent years, including Calgary and Edmonton. Both centres have officially moved into buyers’ territory as soaring prices weaken demand and fuel new listings. More generally, however, economic conditions continue to favour the resource-rich markets in the West over manufacturing-dominated centres in Central Canada hampered by a strong Canadian dollar and softening U.S. import demand. Regina and Saskatoon are currently in the strongest sellers’ position nationally, supported by good affordability, rising population inflows and tight supply.”


Read the Scotiabank Real Estate Trends Report here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate

U.S. foreclosure rates see massive jump and worst not yet over

CNN Money is reporting today that the U.S. home foreclosure rate “spiked 112%” in early 2008, and the worst of it likely isn’t over, as some $362 billion dollars worth of adjustable rate mortgages will “reset” this year.

More than 155,000 families have already lost their homes this year. Approximately 1 in 194 U.S. households have received some sort of foreclosure filing.

Nevada is the hardest hit state with 1 in 54 households received foreclosure filings. Stockton, California tops the list for foreclosures in a U.S. municipality. Approximately 1 in 30 homes have received foreclosure notices.

Read the CNN Money article here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Follow our daily updates on Twitter @SaskatoonHomes.

Norm Fisher
Royal LePage Saskatoon Real Estate