TD Chief downplays housing market concerns
Toronto-Dominion Bank’s chief executive said a housing market correction is a risk in some parts of Canada, but it would not trigger a messy or protracted downturn. “Would a correction make sense? Yeah, of course it would,” Bharat Masrani said. But “our view is that a correction, if and when it takes place, would be orderly, that markets will react in an appropriate way.” According to the Globe and Mail, a number of analysts, including the International Monetary Fund and the Bank of Canada, have expressed concerns about Canada’s housing market, pointing out that lofty prices and high consumer debt loads make the market susceptible to a downturn in the economy or an increase in borrowing costs. Masrani played down the concerns, rejecting the suggestion that regulators might have to step in to prevent the market from becoming more stretched, even as a number of Canadian banks have slashed their posted mortgage rates in the run-up to the busy springtime home-buying season. Read more here
Fee hikes to slam Alberta real estate market
In a budget thick with user fee increases, homebuyers face the biggest challenge — registration fees will triple or quadruple for many new property owners. According to the Calgary Herald, the dramatic hikes for registering new land titles and mortgage documents come as Alberta’s real-estate market is mired in a significant slump, with sales volumes down and prices beginning to dip. The move surprised many in the sector, but Service Alberta Minister Stephen Khan said lawyers and real-estate associations told him there was room to grow, compared with the taxes and fees in other provinces. “We heard that independently from our stakeholders — boy you guys are really, really really low when it comes to fees,” Khan said. “There’s a recognition that having the lowest fees is not a sustainable model.”
New rules to eliminate shady practices?
The Ontario government is bringing in new rules to crack down on unethical real estate agents that try to pump up housing prices with “phantom” offers. “It’s all in the context of these bidding wars, and the idea is a potential buyer knowing ‘am I in competition, and how many people am I in competition with?’” says Bruce Matthews, deputy registrar of the Real Estate Council of Ontario (RECO) which oversees real estate agents and is responsible for enforcing the new rules. According to an article from Yahoo.ca, Matthews says misleading a bidder as to the number or existence of rivals is already against the rules, but that the new standards will essentially force realtors to keep better records that can then be used to confirm that a purchase was above board. “We’re making it certainly harder to fudge the truth,” he says. Specifically, selling agents will have to keep records on successful bids for six years and on unsuccessful bids for one year. As well, agents will only be able to claim they have other bidders if they’ve received a formal offer in writing. The most recent data show that Toronto home sales in February grew 11 percent from a year ago, while prices jumped nearly 8 percent. And that was during the coldest February since 1875.