It seems we can’t go a week without hearing about Canada’s impending real estate collapse. With housing prices continuing to rise across the country, the Bank of Canada might be forced to move on interest rates sooner than they’d like in an attempt to cool the housing market.
The Bank of Canada also issued a warning to Canadians about the growing tendency of home owners to take out home equity lines of credits. Canadians seem to be using home equity loans for two primary reasons. They are either paying down other higher interest loans, such as credit card debt, or using the money for everyday spending.
Craig Alexander, TD Bank’s Chief Economist, released this report stating interest rates will likely rise by 0.50% as early as this Fall, followed by a pause before rising another 0.50% in early 2013. According to the report, these rate hikes will cause a housing correction in 2013.
Is Canada due for a major real estate correction? Can we soften the blow by gradually raising interest rates, or should we tighten lending standards to a maximum 25-year amortization and 10% down payment?
Here’s a look at a few interesting personal finance articles from around the blogosphere this week:
- Rob Carrick shares a reality test for would-be home buyers
- Brighter Life says the Occupy movement blew it
- Canadian Finance Blog looks at the cost of commuting – driving vs. transit vs. cycling
- Free From Broke asks should you give Human Resources access to your Facebook profile?
- Modest Money looks at establishing spending priorities
- My Own Advisor wants to know when to sell a dividend paying stock?
- Planting Money Seeds asks women: are you leaving $500,000 on the table?
- My University Money looks at claiming a business loss
- Balance Junkie explains why gas prices go up before long weekends
- Darwin’s Money looks at high switching costs in business
Have a great weekend everyone!