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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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The changes are meant to make it tougher for buyers to qualify if they put less than 20 per cent down.; ?( R; U1 m' q" m2 X9 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 $320,000 home.0 d. X% W) u7 r7 m
! F( _9 p2 P' B T1 K8 uFirst-time buyers, single-income earners take biggest hit with new mortgage rules8 f) R- ^$ m3 c
CMHC to issue 1st 'red' warning on Canadian housing market4 z/ ]8 _4 N* T& O! q% O, D
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.: U0 x* V7 w7 O
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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.
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7 ]3 e1 I! g: P% ~; zWait and see what happens
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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.' Z% n( y& h6 L6 @6 K
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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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The 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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"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.3 U" V3 m5 O: D# A+ g2 o( D0 N! i
: @3 D {6 r, l0 n- |3 @9 r4 _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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