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Buffett’s Home Capital Bet Backs Turbulent Canada Housing Market

  • Berkshire head supports lender as housing concerns mount
  • Toronto housing market cools after record price gains
Bloomberg business news

Buffett Poised for Immediate Gain From Home Capital

Warren Buffett’s deal to back Home Capital Group Inc. does more than support a struggling mortgage lender -- it’s a vote of confidence for a housing market that everyone from investors to global ratings companies say is a bubble ready to burst.

Buffett’s Berkshire Hathaway Inc., is buying a 38 percent stake in Home Capital for about C$400 million ($300 million) and providing a C$2 billion credit line to backstop the Toronto-based lender. With the deal, the billionaire investor is wading into a housing market that’s been labeled overvalued and over-leveraged, with home prices in Toronto and Vancouver soaring as household debt hits record levels.