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Harper disagrees with pessimistic report on Canadian housing market Wed Sep 24, 1:46 PM Conservative Leader Stephen Harper says he disagrees with a report by brokerage firm Merrill Lynch that warns Canada could be headed for a housing and mortgage meltdown similar to the one that has devastated the United States economy. The report, issued Wednesday by Merrill Lynch Canada economists David Wolf and Carolyn Kwan, said many Canadian households are more financially overextended than their counterparts in the U.S. or Britain. They said it's only a matter of time before the "tipping point" is reached and the housing and credit markets crack in Canada. "I don't accept that conclusion, not at all," Harper told reporters on tour in British Columbia. "We have seen the housing market and the construction market much stronger in Canada than in the U.S.," he said. Harper said Canadian financial institutions have also taken a different approach to lending than their American counterparts. "We don't have the same situation here with the mortgages as was the case in the U.S. with the subprime mortgages there," he said. "So, therefore, I think that our market is in a much stronger position." The report acknowledges that the analysis is more pessimistic than the prevailing view. Many economists have been saying that Canada's housing and banking sectors are much more stable than their American counterparts, and will likely slow down but not crash. But Merrill Lynch Canada - whose U.S. parent is one of the biggest victims of a crisis in financial markets arising from the American housing and mortgage meltdown - said Canadians should be wary. Household net borrowing in Canada amounted to 6.3 per cent of disposable income in 2007, which is more than households in the U.K. and not far off the peak reached by U.S. households in 2005. The report also said housing prices are now falling and inventories of unsold homes are rising sharply in Canada, suggesting that this market turnaround will not be a transitory phenomenon. However, the prevailing view is that Canada's lenders have issued few of the type of subprime mortgages that sparked the U.S. crisis. In addition, a recent study showed that Canadian residential properties are not overvalued in most cities. With files from the Canadian Press lien
Downtown lacks affordable housing: group Jan RavensbergenThe Gazette Wednesday, May 21, 2008 MONTREAL - Lower-income Montrealers - anybody with annual family revenue of $55,000 or less - are getting the squeeze during the city's downtown condo-construction boom, a study released Wednesday concludes. No social or community housing was built in the downtown Ville Marie borough during 2006, a round-table group on downtown housing said. Construction of that type of affordable housing completely dried up, plunging to zero from 11 per cent of residential construction across the borough during 2005. For the two years, an overall total of 184 such housing units were built in Ville Marie. Among the overall total of 3,186 units, that boils down to roughly one affordable unit for every 17 built. The report was produced by the Department of urban and tourism studies at l'Université de Montréal, with the participation of the Comité logement Centre-Sud, which represents tenants. "We need a counterweight to the speculative effect brought to the downtown by such projects as the Quartier des spectacles, the new (French-language) super-hospital and the expansion of the universities," said Éric Michaud, coordinator of the tenants' group. The Quebec, municipal and federal governments have to put in major financing to ensure that construction of affordable housing can resume in Ville Marie, Michaud said. However, he added, the 121-page study wasn't designed to produce a cost estimate, and didn't. Across Montreal as a whole in 2006, there was a slight decline in the production of what is considered affordable housing as a proportion of overall residential construction - to 12.3 per cent in 2006 from 13.8 per cent in 2005. As a 10-year objective from 2004, the city's urban plan foresees construction of between 60,000 and 75,000 new housing units. Of those, 30 per cent, or 18,000 to 22,500 units, would be considered affordable, units occupied by households with annual income of $55,000 or less. Half of these would be government-financed housing for low- or very-low-income tenants, with annual revenue of $35,000 or less. "Downtown, there is a long way to go," Michaud said. About 58 per cent of households in Ville Marie report annual income of $35,000 or less, according to the study. Across all of Montreal's 19 boroughs, the proportion is a significantly less 47 per cent. [email protected] © The Gazette 2008 http://www.canada.com/montrealgazette/news/story.html?id=e349d22d-d262-45e3-bcef-537dbd1cc360