Canada Housing Trust to sell less debt
Canada Housing Trust, the financing branch of the nation's housing agency, may sell 15 per cent less debt this year, as higher interest rates and sales taxes slow the rate of mortgage purchases, reported Bloomberg Businessweek early this morning.
The Housing Trust has issued C$13.9 billion so far this year in 5-year, 10-year and floating-rate notes, according to Canada Mortgage and Housing Corp. Based on those figures over the full year, the trust will probably sell less than C$40 billion. Last year, it sold a record $46.9 billion.
"It reflects the expectation that the Canadian housing market is going to ease from where it is now," said Carlos Leitao, Laurentian Bank Securities Inc. chief economist, to Bloomberg Businessweek. "As interest rates come up a bit and the HST becomes a reality in Ontario and British Columbia, that alone would put the housing market on a slower track."
Canada Housing Trust issues debt for CMHC, which then uses the proceeds to purchase packages of mortgage-backed securities from lenders.