Builders want stiff regulations rolled back
House prices have stabilized, Mattamy says
Canada has avoided the kind of housing crashes that has bedevilled countries for decades thanks to government regulations to tame soaring home prices, according to the largest closely held homebuilder in North America.
“We’re right in the midst of a soft landing, certainly something that we predicted and actually helped influence,” said Brad Carr, chief executive office of the Canadian division of Toronto-based Mattamy Homes Ltd. “It was necessary. The market here was running a little hotter than we thought it should for the long-term health of the marketplace.”
Various levels of government-instituted regulations were implemented to cool markets, including a foreign-buyers tax and stricter mortgage lending rules after home prices surged 60 per cent in Toronto and about 70 per cent in Vancouver in the past five years. The housing market has cooled dramatically since the latest rules were implemented in January, though prices and sales have since stabilized.
Now, builders across the country, including Torontobased Mattamy Homes, are lobbying for a pullback of the tougher mortgage regulations, including one that ensures prospective buyers can meet mortgage payments at interest rates two percentage points above the contracted rate. “It’s been achieved so it’s kind of overkill now,” Carr said.
Peter Gilgan, founder and CEO of Mattamy Homes, was one of the people who lobbied for regulations to prevent speculative buying in the market last year. “I’ve seen too many hot air balloons before: the higher they go, when they burst you don’t survive the landing very well, and what you end up doing is you end up disenfranchising a whole generation of young people, a whole decade of chaos,” Gilgan said.
Mattamy Homes expects to see another 30 per cent unit sales growth in the U.S. next year after about that this year, Gilgan said. The company, has built about 3,000 units south of the border this year, compared with about 4,500 in Canada.