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6 Jan

Now is The Time to Buy

General

Posted by: Tammy Poirier

Canadian Finance Minister Jim Flaherty has vowed to intervene in the hot housing market if prices reach “irrational” levels, leading to both praise and scorn over the holiday period.

In an interview with CTV News, Flaherty says he may cut the maximum term of mortgages insured by the government, or increase the size of the down payment required for such mortgages.

Some media analysts have argued prices have reached unsustainable highs and action is necessary. But not all in the industry want to see such tightening measures.

Joe Santos, president of the Mortgage Brokers Association of BC, says the market will be able to stabilize on its own, despite unexpected gains in 2009.

“In the last few months, prices have rebounded and affordability is less of a motivator,” he says in a released response to Flaherty’s comments. “We feel that we’ve brought forward transactional volume from 2010 into the current business year, and expect stability in prices and volumes in the new year.”

Raising interest rates and reducing amortization will “severely impact” first home buyers in 2010, he says, and potentially cause home values to decrease.