First off, the BC Financial Institutions Commission (FICOM) is proposing a set of Residential Mortgage Underwriting Guidelines to bring BC credit unions (who are not covered under the federal Office of the Superintendent of Financial Institutions, or OSFI) in line with federal regulations restricting HELOCs to a max of 65% of the value of the mortgage, amongst other restrictions.
In an interview with CMT, Doug McLean, the Deputy Superintendent of FICOM claims that the new BC guidelines have nothing to do with the feds, but they were certainly inspired by them given the similarities. Perhaps Doug also got a little antsy from the likes of Vancity offering a little too much lending "innovation" by letting people borrow half their minimum down payments.
The new guidelines are out for feedback, but if I know government agencies, that's hardly more than a formality and they will likely be adopted almost as is. How many people will be affected? Impossible to say, but what's certain is this will prevent some people from extracting equity from their homes, and prevent others from qualifying to buy, thus taking some demand out of the market.
At the same time, CMHC is getting nervous again and is tightening the screws on borrowers. CMHC has announced that they will stop insuring second homes (Finally! Which industry shill on their board thought that was ever reasonable??) and stop accepting "non-traditional" (aka fake) proof of income for self-employed borrowers. Again, the impact isn't huge, with those programs making up only 3% of CMHC business, but the little adjustments add up (more info on the changes here). And CMHC isn't done yet, even announcing that more changes are coming. Funny how things change when you throw out the industry insiders and bring in people that actually know how to regulate financial institutions.
All this comes with the chance it might destabilize our apparently stabilizing market. After 4 years of decline and 6 years of flat prices in Victoria, it seems our market has shed some risk while the rest of the country continued to go bananas (1.3 months of inventory in Calgary right now!). However the government remains the wildcard in this game, and they are not concerned with little Victoria. In order to slow the nation, Victoria might get sideswiped.
207 comments:
«Oldest ‹Older 201 – 207 of 207Yeah most westshore residents (myself included) do the costco trips after work during the week. It's actually civilized in there. I never cross the highway on the weekend. Never. Too many victoria drivers.
A couple of sales this month that surprised me.
Like a 1,200 square foot home on an 8,700 square foot lot in the Marigold area of Saanich at $315,000
A 2-bed and 2-bath condo on Quadra for $190,000 or $222 per square foot.
Even a 1,250 square foot home with an unfinished basement on a 7,200 square foot lot near Jubilee hospital (on the good side of Fort Street) at $495,000
But for every deal, there is a nutter out there paying a price that defies logic. You don't have to pay over 4 million for waterfront home in Oak Bay or half a million for a 715 square foot condo in Humboldt Vally anymore.
Or a 1250 square foot home with a basement suite near Jubilee for $673,000? WTF
These people just have too much money - I mean had too much money.
Dasmo - there was no single year that employables did not grow from 1986 (earliest data on that BC Stats web page) until 2010, it averaged 1.4% per year growth and maxed at 2.8%. It is now in decline. That is significant.
Very interesting. Number one predictor of mortgage default is unemployment. Reduction in home buyers should have the same effect, and sure enough coincides with our flat/declining market.
"you'll spend good portions of your time driving out to the Westshore to go to Costco,"
I think I prefer the once every three week drive out to Costco to the 15 times I would have driven the other way to get to work every day.
JustJack said: "Or a 1250 square foot home with a basement suite near Jubilee for $673,000? WTF"
Yea, what was the big draw for this place? I saw it too and couldn't believe someone paid that much. My first thought was money laundering... but who knows...
Does anyone know the details behind this sale?
Dasmo - there was no single year that employables did not grow from 1986 (earliest data on that BC Stats web page) until 2010, it averaged 1.4% per year growth and maxed at 2.8%. It is now in decline. That is significant.
Happening in most advanced nations. 1945 + 65 years retirement = 2010. That's why we're opening our doors to so many immigrants - more than twice the rate of US. Provinces like Alberta for instance are growing at 3.5% annually, and recently zoomed past 4 million people.
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