A Canadian mortgage industry group says there is no bubble in any Canadian housing markets and is warning the government against any changes in lending conditions that might derail the market.
Will Dunning, the chief economist for Mortgage Professionals Canada, which represents more than 11,000 members across the country, says everybody is waiting for the bubble to burst, but maintains there isn’t enough evidence to say it exists.
“There is a risk that changes in policies of lenders or mortgage insurers that reduce access to mortgages could cause an unnecessary drop in housing demand and housing prices, and bring consequent economic damage,” Dunning said, in a release out Tuesday that accompanies his group’s 38-page report on the state of the mortgage industry.
His comments come as federal finance minister Bill Morneau has called for a “deep dive” into the state of the housing market, including the impact of foreign ownership. Last week, Morneau announced a working group will be formed of federal officials, provincial representatives from Ontario and British Columbia and municipal counterparts in Toronto and Vancouver.
Morneau’s comments came after a torrid month for real estate in May for both Toronto and Vancouver. The composite index for all homes in Metro Vancouver rose almost 30 per cent last month from a year ago while average prices in the Toronto region were up almost 16 per cent during the same period from a year ago.
“At this time, we are hearing calls for more changes to macro-prudential regulation. The proponents want to make mortgage finance more difficult to obtain. That will result in reduced housing activity and, thereby, slow the growth rate for mortgage indebtedness,” writes Dunning, in his report.