The Future of the Canadian Housing Market
par andy lau
1. 1. CMHC will drastically draw down on mortgage insurance
1.1. Insures nearly 50 per cent of the $1.1 trillion in residential mortgage credit currently outstanding in Canada. Growth of the credit has been shocking.
2. Canada Mortgages and Housing Corp.
2.1. CMHC
2.1.1. Promotes home ownership
3. CMHC, Office of the Superintendent of Financial Institutions Canada and Chief Financial Officer of Canada
3.1. Creating Changes
4. 2. OSFI intends to implent some major changes to mortgages
4.1. 1. Capping loans at 65% value of the home (20% at least today) 2. Amortizing loans (paying your principal in 'x' days) You can just keep paying on interest right now.
4.1.1. Affects consumer spending
4.1.1.1. Less money circulating in the economy
4.1.1.1.1. Pop
5. Supply and Demand
5.1. Excess supply of houses
5.2. Not as much demand
5.3. Soon house prices will reflect its true cost
6. Factors affecting the Housing Market
6.1. 1. Mortgage Rates
6.2. 2. Employement
6.3. 3. Income
6.4. 4. Net Migration
6.5. 5. Natural population
6.6. 6. Resale market
6.7. 7. Vacancy Rates
7. Housing Bubble
7.1. Deflate
7.1.1. New node
7.2. Pop
8. Different than the last decade
8.1. Mismatch in price
8.1.1. Where prices are vs Where prices should be
8.1.1.1. Economic Performance
8.2. Aging population
8.3. Rising Interest Rates
9. What can cause the bubble to pop
9.1. Fast economic growth leading to higher interest rate to prevent inflation
9.1.1. Stimulus packages and easing programs
9.2. Other SAFE investment opportunities
9.2.1. Stocks and bonds become optional leading to real estate's investment bandwagon depleting
9.3. Foreign investment opportunities
9.3.1. Decreases domestic investment in the real estate department because of available foreign investments