Tuesday, June 1, 2010

Housing Bubble Speculation Continues

Except this time there is a calmer voice joining in to the endless chorus The Toronto Housing Bubble will burst conversation.

The CBC was following up a piece that was run May 28th 2010 by the Financial Post. The Post is quoting the DBRS (Debt Bond Rating Service) that the continued stability in Canada, our banking systems and stricter credit policies all enforce the concept that the Canadian banking system and mortgage portfolio is doing just fine.

Canada’s housing market is expected to cool off this year and next, but isn’t at risk of falling victim to a U.S.-style foreclosure crisis anytime soon, according to a new report by debt-rating firm DBRS Ltd.

DBRS said in the report that Canada will continue to fare well in comparison to its neighbour to the south when the Canadian housing market corrects itself and interest rates are tightened. That is because lending practices here are much more sound than in the U.S.

“The likelihood of us having the kind of situation they had in the U.S. is extremely low,” said Jerry Marriott, managing director of structured finance at DBRS . “It’s a combination of the lending practices prior to the peak in 2007 — they were more restrained, so there were better underwriting practices in Canada. We also think there are a number of factors in the Canadian market which have lent themselves to more prudent lending.” Read more: http://www.cbc.ca/fp/story/2010/05/28/3081970.html#ixzz0pbNgR1hE

To those who are screaming about pending interest rate increases, Yes, yes, yes! There may be an increase in the bank of Canada Prime from .25% to increase 100% to .50% Let's get a grip eh! We have often and will continue to have ups and downs in the interest rates. They do how ever continue to be the lowest in the last 50 years.

The article is articulate and factual without emotional verve and panic. What does the article omit? The omission is the intangible immigration to centers like Toronto in the Golden Horseshoe for education, employment, business opportunity, a chance to start a new life and open a business. What do we offer? Financial Stability, Good Governance, Excellent Education, a non repressive political regime, Freedom to complain and sound off without being detained and a place to live laugh and play to raise your family.

These 60,000 annual additional households will occupy all those cranes and houses that we cannot believe dot our skyline.

So lets start by welcoming new people to Toronto, enjoy the summer festivities at Caribana and the World Cup Soccer. Quit whining about two days of traffic chaos at the G20 for the opportunity to showcase Toronto and Canada's workforce and knowledge economy to the world.

Add your comments... How do you feel about Toronto's prospects?

While the HST is being implemented and the GST becomes " I miss the GST" there will be shopping opportunities in the Housing Market. Will you be ready to purchase a home? Pre approved and ready to go? Call me... Lets talk.

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