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Did We Really Avert the Credit Crisis?

Barry McKenna wrote an interesting article in the Globe & Mail yesterday.   The crux of the article was that are banking regulations only partially saved us from the effects of the Lehman collapse and subsequent world credit crisis.

Canada is living in a world of artificially low interest rates as a result of the crisis.     Bank of Canada Governor Mark Carney has warned of Canada's household debt being far too high and growing.    When interest rates increase (and they will) there will be a deflation of home values as households struggle with their debt load.    Although analysts expect a correction ... it is still impending, not yet here.   As long as U.S. interest rates stay low, Canada will too.

If you are contemplating selling your house, price it right.   If you are planning on buying a home, I recommend that you get a good mortgage broker (I can recommend several) and negotiate hard for a good long-term rate.

If you would like to read the article n full, here's the Globe & Mail story from September 10, 2012.    

Mike Alleyne, Real Estate Agent
HomeLife Benchmark
Susan S on Sep 12, 2012 12:01 AM posted:
Yes, we have not averted the crisis yet. I continue to see banks offer credit to people who live in a house of cards (literally) and people eagerly accept it because of the low rates. I remember the mortgage rates of the 1980's.... I also see people live far beyond their means. Good advice to folks getting into the housing market right now. Get a good broker. Think ahead!

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