Two interesting releases in this morning’s papers –
“StatisticsCanadasaid that the national average price of new houses rose 0.1 % in January from the previous month following a similar increase in December. On a year-over-year basis, the Agency’s new housing price index rose 2.4 % .”
“Bank of Montreal is reigniting the mortgage wars among the country’s major banks. BMO is bringing back historic low rates after pulling similar discounts a few weeks ago.”
Over the past weeks we have heard serious concerns expressed by both Bank ofCanadaGovernor Mark Carney and Minister of Finance Jim Flaherty about Canadian’s appetite for debt and the unstoppable real estate markets particularly inTorontoandVancouver.
Obviously a “mortgage war” among the Canadian banks will be good news for buyers contemplating purchases in the already stretched markets ofTorontoandVancouver.
We therefore have the makings of a real tug-of-war. The Federal Government and the Bank of Canada on the one hand trying to tamp down Canadian’s appetite for debt, and, on the other hand, lenders being very aggressive so as to avoid losing market share.
Who will win? To use terminology from our neighbours to the south, I’m not sure it is prudent to – “ fight the Bank of Canada”.
