Top banks in Canada are seeking government intervention in addressing the current state of its housing market.
Officials of the Royal Bank expressed continued confidence in their mortgage loan portfolio but would like the government to enter the picture as early as now to help cool the housing market.
Bank officials reminded that prices of houses have soared, triggered by unhealthy supply and demand in housing, over speculation, and low interest rates offered by banks.
On the average, a single detached home in Vancouver area sells for about $1.5 million nowadays. This represents an 11 percent increase. Meanwhile across the pond on Vancouver Island you can find a similar home priced comfortably at about $400,000 says realtor.
The problem of soaring prices among residential properties in Vancouver (and Toronto as well) is a complex one. It thus requires the combined efforts of government sector (federal, provincial, and local) to work it out, bank officials stressed.
Prices have drastically increased over the last 12 months and Canada’s lawmakers should be focusing on these red flags. Prices have jumped in double digits and this isn’t going to be feasible.
Soaring prices have been challenging the housing landscape for some time now and sooner or later this would come to a landing. The problem is how it’s going to correct. Everyone wants to see a smooth landing and for this to happen, government sector must act collectively now.
Some sectors have expressed their two-cents worth on how to taper the surging prices – from imposing levies to curb unhealthy speculation to charging taxes on foreigners investing in the housing market.
Last year, B.C. had implemented tax charges on foreigners buying real estate properties in Vancouver. Property prices have reportedly gone down after a few months.
Banks are willing to support relevant government action plans that would help correct the drastic price increases.