Image Source: 401(K) 2012 The recent 2015 Bank of Canada rate cut stole headlines and was expected to fuel a new low interest rate as banks and mortgage lenders vied to make more home loans. However, as we approach March, a new trend appears to be emerging – which can take things in the opposite direction. Bloomberg News recently picked up on Canadian mortgage insurers and lenders pulling back and making new plans in some pockets of the market. Entities including Home Capital Group and Gentworth MI Canada are reportedly preparing to defend against more defaults and losses on loans, as well as tightening underwriting criteria as they fear the fallout of low oil prices. Between investors withdrawing capital and cash flow interruption, many are expecting high capital rates to fall out of the oil industry as well. These entities want to protect themselves from further losses €“ possibly making it harder to borrow for regular home buyers and homeowners in regards of qualifying for mortgages and their borrow amount. Together, current trends can make residential condos and single family homes, as well as industrial property slightly less attractive to investors in the short term. Expect more activity in commercial property sectors such as multifamily and retail, as Canadian investors seek more safety, growth and yield. Industrial developments like Edmonton airport&#x27s new distribution center may offer exceptions to this, but those that have stalled on buying homes could add to the pool of renters nationwide; increasing performance for apartment building owners. Domestic and global capital will likely seek out other commercial property investments. Retail in particular may provide some shelter to investors looking for properties that can better ride out any potential dip and bounce back easily when things pick up.

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