Tom Davidoff and Tsur Somerville of UBC’s Sauder School of Business were interviewed for a News 1130 story following news that Scotiabank will ease off issuing mortgages in Metro Vancouver due to housing prices in the area.
“In a market like Vancouver or Toronto, where there’s a lot of uncertainty about where prices are going to go in the next few years, and uncertainty about your borrowers’ ability to make payments should interest rates rise, it becomes very unappealing to take that bet, where you get a little bit on the upside, and a big loss on the downside,” Davidoff said.
“It’s the kind of thing, if you were looking for a trigger to change some of the dynamics in the market, this kind of action by lenders in terms of reducing how much exposure they have to the market is the kind of thing that could slow down the pace of sales,” Somerville said.
