Will Flaherty Actually Change the Rules Again?
Just for Halloween, we decided to talk about something very scaaarry – the possibility of Finance Minister Jim Flaherty changing the housing and mortgage rules once again. People still haven’t stopped talking about last July, when he changed the mortgage rules for the fourth time in just as many years. One thing was different about those changes in July though. They seemed so harsh and so drastic that they really seemed to shock people – much more than when he took away the too-long 40-year amortizations, or when he made any of the other changes that he had in the past. Now, he’s meeting with people in the industry to see if it’s time for another change. And you can bet he’ll hear an earful if he touches the rules as they currently stand.
After meeting with private economists this week, Flaherty met a slew of reporters. Reporters that were full of questions pertaining to whether or not that meeting meant that there were more changes on the way. And his answers might not bode well for those that have been keeping their fingers crossed that more changes are not on the way.
“Some of the economists this morning suggested that I have some conversations with some people in the building industry – some more conversations – because of what we’re seeing in certain parts of the country; a re-acceleration of housing prices,” Flaherty said after the meeting.
“I do speak to people regularly in the business and I’m going to do more of it now, because I want to ensure that this isn’t just a temporary bubble,” he continued. “One theory is that we’re pulling forward housing sales by the reality that eventually interest rates will go up and so that some people who perhaps should be waiting a bit are going ahead and buying, but this is speculation and we’re going to have to look into it more.”
But for those who are seriously spooked by this news, don’t fear. Mr. Flaherty isn’t planning on doing anything drastic right now – even if he plans on speaking to those in the industry to hear their concerns.