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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.' X. f' m# e4 h$ q# j3 y
* W, N; u1 p6 g$ q% OThe changes are meant to make it tougher for buyers to qualify if they put less than 20 per cent down.* E% n% T! _% g% O. u D
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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 $320,000 home.
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First-time buyers, single-income earners take biggest hit with new mortgage rules
- K- |! W' r5 q2 P a0 ^CMHC to issue 1st 'red' warning on Canadian housing market) U9 y3 E; o/ `; r% y
Mortgage specialist Peter Kinch says under the new rules, affected buyers have about 20 percent less purchasing power which will put a downward pressure on the Canadian real estate market but he says the impact will be even greater in Alberta, where the slumping economy is already hurting house sales and prices.& G: x$ w% k' C0 J% r
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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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Wait and see what happens3 l+ K E9 k5 m! |8 o) J+ v3 I4 a
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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.0 }& V. z: E( a# {- \6 O+ H1 ?9 v0 w
- p7 z! q& J q/ }! x5 U"It could be advantageous for us to wait and just see what happens to the market in six months," she said.0 R- X8 _0 }9 U) D, x+ N
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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.8 Y7 Q! s! h7 `5 q
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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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