No new regulations, drastic home price increases in 2018 - analysis

By all indications, 2017 has proven to be a tumultuous period in the mortgage and real estate spheres, but a markets observer argued that this year will offer a measure of respite to these beleaguered sectors as well as to a consumer base labouring under an ever-increasing debt burden. In a recent analysis, James Laird – co-founder of RateHub Inc. and president of CanWise Financial – predicted that no new federal-level mortgage regulation will be introduced in 2018. “Over the past several years there has been a steady flow of new regulation imposed on the mortgage industry. Maximum amortizations have been reduced, minimum down payments have increased and stress tests have been added. Some are worried that current regulation has gone too far, which is why the federal regulators will take a break in 2018,” Laird stated. He also projected that variable and fixed rates will experience a modest rise, at best. “The Bank of Canada will increase the key overnight night rate by 0.5% causing all variable rates to rise. This will put upward pressure on bond yields which will cause fixed rates to rise as well.” “In 2017 the Bank of Canada moved the key overnight rate twice, but it still remains historically low. The Canadian economy is doing well, so the Bank of Canada will choose a modest strategy of two rate increases, with a few months in between each move,” Laird added.

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