14 Feb Report: Tighter mortgage rules threaten key industry
A new industry report is now documenting what could well be at stake with further tightening of the country’s mortgage rules — detailing the economic impact of the housing and mortgage industry.
“We want the government to be aware of the economic and job contribution that housing and the real estate industry provide,” said CAAMP CEO Jim Murphy, coming off a second visit to Parliament Hill in as many months. ”CAAMP, based on current data and research, sees no need to further tighten or restrict access to residential mortgages at this time.”
A new report for CAAMP Chief Economist Will Dunning is bringing that point home.
It identifies all the way that the Canadian housing sector is a significant economic driver.
Housing and mortgage activities, along, “could account for more than 1.35 million direct and indirect jobs (about 8 per cent of total Canadian employment,” writes Dunning. “The housing and mortgage industry has been particularly important to job creation these past five years.”
The report estimates that from 2006 to 2011, 18 per cent of all job creation occurred as a direct and indirect result of growth in the housing and mortgage sector.
Rising home values, themselves, led to greater consumer spending, and thus, a stronger economy.
CAAMP estimates that rising home values from 2006 to 2011 led to $17 billion in additional economic activity, or about 1.2% of total GDP in Canada.
The report also stresses the soundness of that growth.
“The Canadian housing economy is safe and stable,” writes Dunning, contrasting it to the U.S. sector.
At the peak of the U.S. housing boom, approximately 20 to 25 per cent of all US housing sales were for investment purposes, says the report, but in contrast, “CAAMP estimates that 2 per cent to 3 per cent of Canadian home sales nationally are investment properties.”
Murphy has taken that message directly to finance committee members. The reception has been largely positive.
“We want to make sure key decision makers are aware of the importance of these issues,” he told MortgageBrokerNews.ca, “and not take any measures that unnecessarily reduce housing activity thereby damaging the economy.”
Click HERE for the full report.