Flaherty, economists optimistic, but warn of overheated housing market
The federal government and some of the country’s leading economists remain worried about Canada’s housing market and rising household debt, and are cautioning Canadians against borrowing too much. However, they are more optimistic about the overall state of the Canadian economy than they were just last fall, and now project stronger-than-expected economic growth in 2012.
As Ottawa prepares to deliver the Federal budget at the end of March, Finance Minister Jim Flaherty and economists share concern about household debt, the Globe and Mail reports.
Flaherty continues to caution Canadians against taking on more debt than they can handle, and to keep in mind that mortgage rates are continually changing. However, he seems optimistic that the Canadian housing market is balancing.
There has also been discussion among lenders that it may be prudent to reduce the maximum amortization period and increase the minimum down payment amount from 5% to 10%. These changes, however, are only in the discussion stage and must be carefully considered before being carried out.