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A real estate expert believes the new mortgage rules that went into effect Monday will hit Alberta's market the hardest.
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- Y/ J1 `. m/ y% C# e" ?! rThe changes are meant to make it tougher for buyers to qualify if they put less than 20 per cent down.3 l5 Z8 v6 x8 E0 Z
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Prior to today, an Alberta family with a household income of $80,000 would likely have qualified for a $400,000 home but now they will be approved for a $320,000 home.+ h( W8 j& Z* u7 J/ [# [4 Y( J( M
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First-time buyers, single-income earners take biggest hit with new mortgage rules
, e8 o; K1 V, v! C0 X1 x |CMHC to issue 1st 'red' warning on Canadian housing market
0 Q3 Y b8 v O% WMortgage specialist Peter Kinch says under the new rules, affected buyers have about 20 percent less purchasing power which will put a downward pressure on the Canadian real estate market but he says the impact will be even greater in Alberta, where the slumping economy is already hurting house sales and prices.6 g% j' @! o0 y' K; j
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"In a real estate market that's struggling to recover already, it could have a very negative impact on that market," Kinch said.9 x: P* o! r" g
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Wait and see what happens! h7 b% b* a1 s3 U
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Natalie Whitney and her young family say that's what they're banking on so they've just decided to put their house hunting on hold.4 }& n: W; m7 U* x
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"It could be advantageous for us to wait and just see what happens to the market in six months," she said.
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8 h+ E+ B; ?# l0 L2 O5 K1 D+ iThe Canada Mortgage and Housing Corp. issued its first ever "red" warning on Monday, referring to real estate affordability issues spreading beyond Vancouver and Toronto.
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+ m. k# s" @3 S6 C8 q"These factors will be reflected in our forthcoming Housing Market Assessment on Oct. 26. They will cause us to issue our first "red" warning for the Canadian housing market as a whole," CEO Evan Siddall wrote in a Globe and Mail column.8 C8 e$ z0 m/ H4 h( r% C
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Kinch says for buyers who can't wait, they'll either need to come up with a bigger down payment or lower their expectations about what they can afford. |
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