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Notable News of the Week: February 24, 2012

Starting every Friday, will recap the latest news from the Canadian housing and mortgage industries, so you can consider it a weekly catch-up. This past week, most of the discussion focused on the Canadian housing market and the possible tightening of Canadian mortgage rules.

Canada’s housing prices won’t crash – The Financial Post

The housing market in Canada is moderating – a decline cannot happen until we see one of several triggers such as a rise in mortgage rates or unemployment. House prices are heightened but not at extreme levels. The national average is skewed by the Toronto and Vancouver housing market which is affected by heavy foreign investment.

The debate over Canadian debt dataThe Globe and Mail

By now, most of us are familiar with the number 150 which represents the current Canadian household debt-to-income level. The number is close to that of the U.S. at the height of housing crash. The problem is that many economists believe that this number is a poor indicator of how indebted we really are. That number doesn’t take into account whether Canadians are struggling with their payments.

Mortgage market shareCanadian Mortgage Trends

Canada’s mortgage market is worth $1.1 trillion and the Big Five banks control nearly two-thirds of it. The Royal Bank of Canada (RBC) carries the most mortgages with $186.3 billion under the books. Over the past year, the Toronto-Dominion Bank (TD) has seen the largest percentage of market share growth (they now command 14.4% of the market, good for second place).

The U.S. accused of interfering in Canadian bank practicesCTV

The U.S. is looking to pass sweeping bank reforms called the “Volcker rule”. These new reforms would negatively impact the liquidity of Canadian corporate and government debt markets as well as interfere with bank risk management practices. Other countries that would be affected have also begun filing for complaint such as the U.K., Japan, and the European Commission.

It will be tougher to get a mortgage in future – The Vancouver Sun

According to a recent Reuters poll, 71% of economists and strategists believed Ottawa would tighten mortgage rules over the next 12 months. If the government does indeed tighten the mortgage rules, it would represent the fourth intervention in the real estate market in the past four years. The forecasters said that home prices will fall roughly 5% before stabilizing.

Mortgage fraud up 150 per cent in the last yearThe Toronto Star

A recent report by Equifax Canada has reported an increase in mortgage fraud. The biggest frauds have been recorded in Quebec and Ontario. Last year, Equifax helped detect $650 million in attempted fraud, for a tune of $1.7 million/day.

The most overpriced housing markets in the developed worldThe Business Insider

The business insider compiled a list of the 20 most overpriced housing markets in the world and Canada came in at number two behind Belgium. Our homes are said to be overvalued by 54% (Belgium was 56%). Fourteen countries on the list are located in Europe. America was present on the list with an overvalution of 9%.

Real estate survey reveals the motives of selling a houseMarket Wire

The life events that motivate to buy a new home were captured in a recent Coldwell Banker survey. The most common reason for moving was revealed to be “the addition of a new baby/growing family”. Falling behind at a close number two was relocation for job reasons. An updated or new kitchen was seen as the most important feature to homebuyers.