7 March 2011
(About 2%-3% of Canadians buy their first houses each year).
• Guatieri says that deterioration of HDI can restrain demand and price growth, but it still shouldn’t provoke a significant correction (like the ones we saw in 1989 and 2008 when the HDI was 45%).
• “The housing demand will be restrained due to the reduction of the maximum amortization period for insured mortgages from 35 to 30. It will take effect on March 18 and, supposedly, reduce the affordability level by about 7%.”
• Another interesting thing is that the price-to-income ratios (so often noted in the mass media) can’t show the whole picture of the real estate market situation. Such structural factors as an influx of foreign wealth, rising resource prices, and strong population growth can also push house prices up in certain regions.