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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.
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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 $320,000 home.' U; Z, @7 b$ B8 N) ]* k% S
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First-time buyers, single-income earners take biggest hit with new mortgage rules* |$ _! y5 Z9 G8 c0 F# ~
CMHC to issue 1st 'red' warning on Canadian housing market
: s2 y- o4 u H' Q7 EMortgage 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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"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 happens2 B( b4 Z& ~2 S% ]) l. L5 T- r
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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.; w/ ]- n; ~3 p; i* R. V3 c
9 l# W. i) l- f1 l: y( z7 G( T8 m"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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7 b1 z, s0 }' G. i1 j"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.2 P4 R+ g) @9 ~* U/ \# T
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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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