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May 17, 2012 Andrew Mayeda Bloomberg News
Canada’s banks, ranked the soundest on the planet by the World Economic Forum, aren’t immune to collapses triggered by falling housing prices, according to the government official implementing new mortgage rules.
Previous failures of Canadian financial institutions were due to bad real estate lending and sharp falls in housing prices, and these can happen again, Vlasios Melessanakis, manager of policy development at the Office of the Superintendent of Financial Institutions, wrote in documents obtained by Bloomberg News under freedom-of-information law. The last failure in Canada was in 1996.
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May 16, 2012 PAUL WALDIE AND TAVIA GRANT theglobeandmail.com
Mayur Arora is seeing something few would have expected in Vancouver’s real estate market – people walking away from deposits on houses, convinced prices will fall further.
“It happened twice in the last month. One [deposit] was $75,000 and one was a $20,000 deposit, the guys just walked away from it,” said Mr. Arora, who runs Oneflatfee.ca in Surrey, B.C. “They are going to wait it out. So they lost $75,000 and $20,000, but if the market comes down $150,000 on a $1.5-million house, that’s not uncommon.”
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May 09, 2012 Andrew Mayeda and Chris Fournier bloomberg.com
The head of Canada’s biggest bank and one of the country’s leading developers said the housing market is not in a bubble, even as one economist said Toronto is caught in a “condo craze.”
Canadian housing starts rose to the highest since September 2007 last month, led by multiple-unit projects, Canada Mortgage & Housing Corp. said yesterday. The annual pace of home starts rose 14 percent to 244,900, Ottawa-based CMHC said.
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May 07, 2012 John Greenwood business.financialpost.com
One view is that Canada avoided the financial crisis because of the strong oversight of the federal banking regulator, the Office of the Superintendent of Financial Institutions. When Wall Street firms were swapping around risky credit derivatives in the bubble years, OSFI warned the banks and insurers in this country to stay away, so when the music stopped in 2008, they had only limited exposure.
Now Ottawa wants to further buttress Canada’s financial system by putting the Canada Mortgage and Housing Corp., one of the largest financial institutions in the country, under OSFI’s rule.
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May 04, 2012 Caroline Van Hasselt online.wsj.com
TORONTO (Dow Jones)--Amid the double-barrel threat of soaring household debt and rising home prices across Canada, regulators are taking aim at one of the most popular--and controversial--lending practices by the country's big banks.
Home equity lines of credit, or HELOCs, have soared in recent years, even after similar lending helped fuel the ill-fated U.S. housing market bubble. Canada's largest banks--which have generally won praise for conservative lending that protected them from the worst of the financial crisis--defend the loans.
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April 24, 2012 Reuters business.financialpost.com
OTTAWA — Bank of Canada Governor Mark Carney repeated on Tuesday that the central bank might have to increase interest rates and he continued to fret about the high levels of debt that Canadians are taking on.
Carney used an appearance at the House of Commons finance committee to stress the central bank’s recent message that rates could have to go up despite global economic uncertainty.
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April 24, 2012 Jesse Kline nationalpost.com
Canada’s housing market has been relatively stable over the past year, with the notable exception of Toronto, which has overtaken Vancouver as the country’s hottest real estate market. Prices in Canada’s largest city have risen 10.5% over the past year and there are now three times as many cranes dotting Hog Town’s skyline as there are in the Big Apple.
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April 22, 2012 Kate canadianmortgagesinc.ca
Bank of Canada governor, Mark Carney, had a busy week this week. First he announced that the Bank would keep interest rates at their historic lows – for now; also saying that given improvements in the Canadian and global economies, the Bank will most likely start to raise them sooner than expected. Then on Thursday he was in Ottawa talking about HELOCs, warning of the dangers Canadians are taking with them. On Saturday he was doing an interview with CBC Radio, talking about Canada’s condo market and the overvaluations happening in many of Canada’s hottest markets.
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April 22, 2012 thestar.com
Parts of the Canadian housing market, especially condominiums in some major cities, have seen prices jump to levels that warrant caution, the head of the country’s central bank said in an interview broadcast on Saturday.
“There are issues, particularly in some parts of the country in the condo market, without question, where activity has been particularly strong, has reached back to levels of the late 1980s,” Bank of Canada Governor Mark Carney told CBC Radio when asked if Canada was experiencing a housing bubble.
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Apr 21, 2012 Neville Bennett interest.co.nz
Canada has been held up as a “miracle” economy that escaped the worst of the GFC.
But any Kiwi looking at its present performance will be reminded of NZ a few years ago when we had a mirage of booming housing and consumption.
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Apr 19, 2012 MARK DUNN thesudburystar.com
OTTAWA -- Mark Carney offered some advice to Canadians on Wednesday -- be careful about borrowing because the days of bargain-basement interest rates are coming to an end.
"If you are borrowing, make sure that you can sustain that borrowing in a world of higher interest rates," the Bank of Canada governor said at a news conference, where he said the bank's benchmark overnight rate would remain at 1% for the time being.
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April 18, 2012 Will Van’t Veld Troy Media
EDMONTON, AB – Bubbles tend to be defined as situations in which an asset’s price has been bid up well beyond what current, or even future, fundamentals would dictate – which tend to centre on interest rates, the labour market and demographics.
It might, therefore, seem relatively straightforward to identify and deflate bubbles before they occur, but the reality of the situation is far different.
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April 17, 2012 Pete Evans, CBC News
Tighter CMHC rules are pushing more and more people into subprime borrowing to finance their real estate plans.
As the big banks get choosier about who they'll lend money to in this hot housing market, people with questionable credit are benefiting from Canada's once-small but now booming subprime mortgage industry.
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April 17, 2012 Don Pittis cbc.ca
I want you to be afraid. Very afraid of the Canadian housing market.
I want people who are considering buying a house in Canada to be the most frightened. People who just bought a house also have every right to be nervous. But even if you don't have a stake in the property market, I would like you, too, to be fearful of a bubble in Canadian property.
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April 15, 2012 SHELLEY YOUNGBLUT theglobeandmail.com
Speculation in Canadian cities such as Vancouver and Toronto is wildly out of control, and the real-estate bubble in this country is overdue for a correction painfully similar to the one south of the border in 2008. As well, Canadian investors who are buying in the depressed U.S. market today are taking much bigger risks than they think.
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April 12, 2012 CBC New cbc.ca
Japanese bank Nomura suggests 0.5 per cent increase
A major international bank said today that Canada's best hope to avoid a real estate crash would be for policymakers to raise interest rates by half a per cent over the medium term.
"We believe that the best way to engineer a soft landing in the housing sector would be for the Bank of Canada to increase its policy rates slightly," says the report, from international financial conglomerate Nomura's contributing economist, Charles St-Arnaud.
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April 12, 2012 CTVNews.ca Staff ctv.ca
Canadians continued to pile on debt despite dire warnings from financial experts and the central bank about cheap borrowing costs, a new study says.
Non-mortgage debt was up 3.4 per cent year-over-year in the first quarter and new loans rose by about one per cent, Equifax Canada's quarterly consumer credit study showed.
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April 11, 2012 carolyn ireland theglobeandmail.com
Sherry Cooper was reminded of just how devastating the U.S. housing crisis has been for families and the overall economy in that country after speaking recently with a friend who is having trouble selling his house in New Jersey.
Ms. Cooper, the chief economist at Bank of Montreal, is starting to worry about Canada’s housing market after refuting the arguments of the extreme bears in the past.
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April 10, 2012 Andrew Coyne business.financialpost.com
Even by Maclean’s standards, the cover was alarming. “You’re about to get burned,” screamed the headline, over a picture of a house that was literally on fire. “Canada looks like the us before its devastating housing crash — maybe even worse.” And the kicker, for those still hesitating: “Why it’s officially time to panic.”
This last was doubtless something of a little in-joke. For my old colleagues at Canada’s newsweekly, it is always time to panic, especially about house prices. The magazine’s editors inhabit a world beset by all manner of hitherto undetected demons, from more expensive groceries (“sudden shortages, riots over prices, the world food crisis is about to hit home”) to insomnia (“the truth about a modern epidemic”) to, well, “The Return of Hitler.”
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April 07, 2012 Julian Beltrame The Canadian Press
OTTAWA - Mark Carney has a dilemma: He views record high household debt the number one domestic risk to the economy, but believes he would hurt the recovery if he raised interest rates to slow borrowing.
But the Bank of Canada governor said in an interview with The Canadian Press that he would be prepared to intervene if things got out of hand.
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