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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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; ~/ b* t3 B' w) L! G- A3 c' e; a4 RThe changes are meant to make it tougher for buyers to qualify if they put less than 20 per cent down.
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/ u0 s3 z9 H% D1 j; i1 z& QPrior 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 $320,000 home.6 y" @3 ^/ c4 T0 R+ Z
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First-time buyers, single-income earners take biggest hit with new mortgage rules
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Mortgage specialist Peter Kinch says under the new rules, affected buyers have about 20 percent less purchasing power which will put a downward pressure on the Canadian real estate market but he says the impact will be even greater in Alberta, where the slumping economy is already hurting house sales and prices.* Q G( y' s D% f5 v6 ~. Y2 F7 m
, `3 r4 ~. A$ y2 b2 v"In a real estate market that's struggling to recover already, it could have a very negative impact on that market," Kinch said.) b+ {3 L, L o: a- A: p! H1 |1 n
/ Z& S$ t# k& m- s( |Wait and see what happens
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# {9 w2 f: l- d4 A! WNatalie 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.3 n/ @1 M0 A. X+ 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.' m* t# C8 g/ r
6 I5 i1 b1 U: u. TThe 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.
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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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