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A parliamentary study that lasted for a year on the Canadian housing market, reached the conclusion that Ottawa needs to make more of an effort to help first-time house buyers, and monitor the housing market conditions from the side. The report was released by the House of Commons’ finance committee, with recommendations for Ottawa on how they should take action in housing markets of Vancouver and Toronto. The main concern for first-home buyers was that they were taking on a lot of mortgage debt, which would end up influencing the market for everyone.
This comes at the time when there are fears of a financial crisis on the horizon for Canada, and monitoring the housing markets in Toronto and Vancouver has become crucial, in order to stabilize the market. There is fear that rising prices for homes is due to limited availability of homes in the market, and a balanced approach is required to ensure stability.
The federal committee reported stated that speculation about the state of the housing market is one of the reasons behind the rising prices. However, there was no recommendation made specifically to the government in the report, regarding how they should govern first-time home buyers. The result of this report could be that first-time home buyers need to be guided properly by the state in order to ensure that home buyers can easily afford payments, when interest rates are set to increase.
The government is concerned about the state of the housing market in the Golden Horseshoe and Toronto, with price spikes in recent times causing concern. This is partly because of the low insurance rates offered by the Bank of Canada. However, raising the rates now will not solve the problem, as it will stop speculators betting on price appreciations and lead to negative results on other parts of the economy.