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kevinan108

China's easing aimed at housing market - MarketWatch - 0 views

www.marketwatch.com/...d-at-housing-market-2012-05-14

China housing bubble cooling slowgrowth banks

shared by kevinan108 on 18 May 12 - No Cached
  • The People’s Bank of China announced on Saturday it plans to lower then the ratio of reserves bank must set aside as deposits at the central bank by a half percentage point, effective Friday.
  • Investment in real estate was up 18.7% in the first four months of the year, cooling significantly from a 23.5% gain in the first three months of the year, according to official figures released Friday. The data weren’t broken down on a monthly basis.
  • The numbers indicated property developers were cutting back on land purchases, with outlays on sites of 182 billion yuan ($28.81 billion) in the January-to-April period, a drop of nearly 14% from a year earlier.
  • ...1 more annotation...
  • Standard Chartered said developers’ concerns over the property market were reflected in data showing residential investment hitting the wall in April, growing just 4% during the month, compared to a 15.1% year-on-year rise in March.
Kevin Mao

Canadian banks not immune to housing bubble: OSFI official | Mortgages | Personal Finan... - 0 views

business.financialpost.com/...o-housing-bubble-osfi-official

canadian banks housing bubble mortgages finance canada

shared by Kevin Mao on 17 May 12 - No Cached
  • Canada’s banks, ranked the soundest on the planet by the World Economic Forum, aren’t immune to collapses triggered by falling housing prices
  • Previous failures of Canadian financial institutions were due to bad real estate lending and sharp falls in housing prices, and these can happen again
  • “Just because nothing happened in Canada in 2008 (a U.S.-centered crisis), does not mean that Canada is not vulnerable to a housing correction now.”
  • ...19 more annotations...
  • Finance Minister Jim Flaherty has tightened mortgage rules three times and put the federal housing agency’s books under regulator oversight
  • Bank of Canada Governor Mark Carney has repeatedly warned household debt is the economy’s biggest domestic risk.
  • Canadian housing starts rose to the highest since September 2007 last month
  • “How many new lending ‘guidelines’ can the market bear before it breaks?”
  • “The market may break because the fundamentals are not sound (i.e. overvaluation of homes), not because of OSFI guidance,” Melessanakis wrote in response.
  • Canadian existing home sales rose 0.8% in April from the previous month and 11.5% from a year earlier
  • The average home price rose 0.9% from April 2011,
  • Four Canadian banks were among the world’s six strongest in Bloomberg’s second annual rankings.
  • Lenders have been increasingly skeptical of the need for new rules to cool the housing market
  • Flaherty reduced the amortization period on mortgages backed by the government to 30 years from 35, the third time since 2008 he has tightened rules for home loans
  • Flaherty introduced legislation April 26 that includes measures to strengthen oversight of Canada Mortgage & Housing Corp.
  • The law allows OSFI to review CMHC’s books at least once a year, and prohibits banks from using insured mortgages to back covered bonds,
  • Canadian banks should not be “lulled into a false sense of security” by steps policy makers are taking to prevent another financial crisis
  • “Are the banks equipped to handle a 40% drop (what occurred in Toronto market in early 1990’s)?
  • in some places like Vancouver, maybe Toronto, obviously you’re going to have greater risk there of price volatility,”
  • OSFI’s guidelines suggest lenders limit home-equity lines of credit to 65% of the property’s value.
  • last financial institution failure in Canada occurred in 1996, when Security Home Mortgage Corp. collapsed
  • Security Home Mortgage had assets of $65-million the year before it failed.
  • Eighteen financial institutions failed in the 1990s, including Confederation Life Insurance Co., which had $19.2-billion in assets at the end of 1993. There were 23 failures in the 1980s, including Northland Bank, which had $1-billion in assets
  • Kevin Mao on 17 May 12
     
    An article about how Canadian banks are not impervious to a housing bubble.
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