“A lot of people are making noise about trying to slow down real estate in Toronto and Vancouver. You’re not going to slow them down through government intervention, unless it’s draconian and stupid,” said Brad Lamb, the president and CEO of Lamb Development Corp in an interview with BNN.
Finance Minister Bill Morneau targeted Toronto and Vancouver in his remarks following the decision to tighten lending rules earlier this month, branding the cities as “pockets of risk” in the housing market.
Starting in February, mortgages backed by the Canada Mortgage and Housing Corporation (CMHC) will require a 10 percent down payment – up from five percent – on the portion of the loan over $500,000. The current five percent minimum remains in place for homes under $500,000. The maximum purchase price must be below $1,000,000 on all CMHC insured mortgage loans.
“When you were buying a $999,000 condo or house you used to have to put down $50,000 down, now you have to put $75,000 down. When you’re buying a million dollar house you can find another $25,000,” said Lamb.
Lamb says the federal government should embrace rising demand for condo housing, rather than putting up roadblocks for homebuyers, in order to guard against a weaker economy.
“What’s carrying the Canadian economy is my industry, the construction industry. I don’t think you want to monkey with it, or you’ll have a recession for sure,” he said.
BNN
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