Could new mortgage rules pop housing bubble?
But the good times can’t continue, say some observers, particularly since so many home buyers are opting for short-term, variable-rate mortgages, which will eventually ratchet up, potentially leaving many owners offside.
Fears of a U.S.-style housing bubble have prompted some of Canada’s banks to ask the government to calm the market by tightening mortgage rules, making it just a little harder for shaky buyers to get themselves into trouble.
But at least one banker thinks this would be a really bad idea.
Peter Aceto, the head of ING Direct Canada, sees such drastic changes as precipitating the very bubble they’re supposed to prevent.
“The banks in this country don't have to lend to the limit of the law – they can make smart rules on their own and not have Minister Flaherty make the decision for them,” Aceto told the Globe and Mail.
Are we in the midst of a housing bubble? Would such changes prompt you to do anything different?
By Gordon Powers, MSN Money