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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." F4 G- a! z" l7 N1 K E1 R
" L" A; }2 s( K+ p. gThe changes are meant to make it tougher for buyers to qualify if they put less than 20 per cent down.
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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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! H1 u @8 _: K7 sFirst-time buyers, single-income earners take biggest hit with new mortgage rules4 b2 c) ~2 q, e. r3 U9 l4 \
CMHC to issue 1st 'red' warning on Canadian housing market& m4 u- ]+ U4 c& T9 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.- ?% H8 p% o d# a9 A; k
$ ~7 r I1 W( e G"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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2 m1 _2 ~6 ~* N9 RWait and see what happens
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7 }' s% q( D7 Q- c3 BNatalie 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.
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9 e' C& b3 K1 c2 W/ L" O8 o7 _7 j"It could be advantageous for us to wait and just see what happens to the market in six months," she said.. t* N1 y! u) Y) g& 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." _% ?, z: ~2 y, m" D
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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./ p+ v% y+ f8 c/ _/ ^) d3 V$ F
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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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