Chinese Property Stocks Rally on Hope for More Policy Support
Shares of Chinese property developers extended a rally after Beijing announced forceful measures to shore up the beleaguered property market.
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Shares of Chinese property developers extended a rally after Beijing announced forceful measures to shore up the beleaguered property market.
The People’s Bank of China will establish a nationwide program to unleash 300 billion yuan ($41.5 billion) in cheap funding to help state-owned companies buy unsold homes, officials announced.
Land Securities Group Plc wrote down the value of its City of London office portfolio by almost 14% last year, dragging the UK commercial real estate landlord to a full year loss.
Football’s global governing body opened the door to potentially moving its headquarters from Zurich, while stressing that it’s “happy” for now having its main office in Switzerland
China’s economic recovery tilted even further toward manufacturing, leaving it more vulnerable to trade barriers and highlighting the stakes of a new bid to shore up domestic demand.
Sep 23, 2016
By Greg Bonnell
Canadians with big mortgages secured with small down payments will likely have to start paying more for mortgage insurance next year, after the country’s top financial regulator moved to hike capital requirements for the industry.
The Office of the Superintendent of Financial Institutions issued new draft criteria on Friday for how much money federally-regulated mortgage insurers have to put behind their portfolios. The regulator is bringing in the new rules in an attempt to address riskier elements of Canada’s mortgage market.
Canadians who put down less than 20 per cent for their home’s purchase price need mortgage insurance. In Canada, the big players are the country’s housing agency Canada Mortgage and Housing Corporation, publicly-traded Genworth Canada MI, and Canada Guaranty.
OSFI said the draft requirements – which take effect Jan. 1 next year – incorporate new drivers of risk, including the creditworthiness of homeowner, the remaining amortization period and the outstanding loan balance.
“When house prices are high relative to borrower incomes, the new framework will require that more capital be set aside,” OSFI superintendent Jeremy Rudin said in a release Friday.
OSFI said it wants to ensure mortgage insurers are in a better position to “withstand severe, but plausible losses” stemming from their business.
WHAT IT COULD MEAN FOR HOMEBUYERS
If you're a homebuyer with a big balance outstanding on your mortgage and many years left to pay it off, you’re likely facing higher premiums for mortgage insurance.
In a statement, Genworth said it’s holding more capital than required by current rules and expects to be fully complaint with the new guidelines when they take effect.
It also warns the new rules “could lead to a corresponding increase in premium rates.”
In an email to BNN, CMHC said it supports “efforts that better position mortgage insurers to withstand severe economic challenges.”
Canada Guaranty was not immediately available for comment.