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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.8 H) ~& o! Q9 Y# |* c
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The changes are meant to make it tougher for buyers to qualify if they put less than 20 per cent down.
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3 f' z& i- [5 L. a; x5 APrior 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 $320,000 home.! |8 ?# S. _2 ]7 Z+ e ^3 s
& E' o2 Q4 M FFirst-time buyers, single-income earners take biggest hit with new mortgage rules
0 D$ s( N5 i4 M7 i$ CCMHC to issue 1st 'red' warning on Canadian housing market5 G) ^- T& l4 r' A$ }. O% ?% O
Mortgage 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.
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+ K6 S% K# I& N' @"In a real estate market that's struggling to recover already, it could have a very negative impact on that market," Kinch said.9 P9 o/ y6 [/ [8 ]
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Wait and see what happens* T3 h' v4 |6 a$ _
$ `2 p& P, L K% v6 ] N! kNatalie 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.: z Y# } A* M6 U( @
7 j" w# w: @6 a8 x, F"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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9 Y3 l7 ~ T# a3 \* c- CThe 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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' ]' T& u' |! \, y"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.# R+ a) J6 o7 q7 N7 p6 z
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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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