Will Canada’s new mortgage rules zap Toronto’s condo boom?
We’ve been wondering what the new federal mortgage regulations will mean for Toronto’s real estate market (especially since Finance Minister Jim Flaherty’s worries over the local condo boom were a key motive for the rules). This week, some chilling words from Moody’s Investors Service: though the measures will likely cool home sales across the country, it already “may be too late to avoid a housing correction.” Moody’s analysts write that a massive build-up in consumer debt and the fact that disposable income is growing more slowly will make it difficult for Canadians to pay off what they owe, especially if interest rates rise—all of which could send house prices plummeting. Of course, as is always the case with housing market predictions, there are many willing to take a dissenting view, namely, that the regulations won’t have a significant impact on Toronto’s condo mania. [Financial Post]