Are we missing something?Are these new mortgage rules to slow down a bubble and restrain people from getting over their heads? Really? Not so fast!

I don't mean to sound like a cynic here.

Truth is that over the last few years the banks in Canada have come up with creative ways to reduce the chances of a housing bubble.

In an environment where the US has such low interest rates; a strong loonie; emergency lending rates; people willing to go into great debts...naturally borrowing is going up.

Inflation being light or reasonable and the strong dollar domestically doesn't leave room to cool the market by raising rates.

So tinkering with mortgage rates and rules to keep people away from market who may find themselves buried when rates rise (the very same ones who may look to ammortize over 35 years to make it affordable to buy) is the next best idea the government has.

If we slow down borrowing and the heated res market, then perhaps a bubble won't burst and consumers won't find themselves in deep shit. When consumers run 70% of your economy, if they go belly up (or down), you've got big problems in your economy!

Here's the thing...guess what has happened in these 3 recent instances:

1) HST is introduced
2) Mortgage rates and home lines of credit rules are tweaked so that buyers must satisfy 5 yr fixed heightened rate to qualify
3) Mortgage rules changed so that buyers can't amortize over 30 years and you can tap less of your houses value for money

In each one of these circumstances, there is a deadline for the rules to kick in.

The net result::

There is a surge of activity in the markets. Buyers feel like they better run to the bank and leverage the existing rules and buy. So more homes sell. In fact the numbers spike. And then the arguement is that they should taper off when the new rules hit.

I also can't help but wonder about the timing. Introducing further rules to restrict the ease of mortgage credit and having a commencement date of 60 days....that takes us right to the heart of the "spring market"....the busiest season for buyers.

Buyers will come out of the woodwork and figure out ways to get excited and work on their banks. Banks are still in the business of loaning money. Hey in the US, the banks are keeping rates low so money gets lent.

Anyway, what I'm suggessting is that all these attempts to slow a bubble and restricty those buying homes, when passed thru the media with a looming date of changing rules, seem to get the mortgage lenders, banks, realtors and buyers and sellers excitable and we actually get a further push into the market!