CIBC’s Benjamin Tal says ‘No US-Style’ Crash for Canadian Housing
Matt Chan • November 7, 2012
If You Are A Home Buyer Looking For A New Home – Don’t Wait For Big Crash To Get A Mortgage!
Last week, there was a great article that discusses how CIBC Deputy Chief Economist Benjamin Tal compares our current housing slowdown to the US. In short, it really doesn’t. If you would like to read the article, here it is:
This is a great article that goes into depth why our mortgages are very different than those of the US during their market crash. Here is a summary of the key differences between the Canadian housing market and the US housing market:
- Canadians’ debt to equity is very high just like it was in the US. The key difference is that the quality of Canadian debt is much higher than that of the US.
- Americans had a higher proportion of their mortgages in variable rates than Canadians. More importantly, Canada was not selling mortgages with a huge increase in rate after an introductory term.
The Economic Analyst followed up with a very well written article that states how much the author disagrees or agrees with Ben Tal’s comments.
Many good points as to why there likely won’t be a major housing correction in Canada.
Please contact me if you have any questions or comments.
Matt
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