The changes announced this week by Finance Minister Jim Flaherty should have little impact on the housing market. Despite what some reports are saying, the percentage of home buyers impacted by these changes is small.
So what changes were made? Here is a summary.
1) All borrowers must now qualify under a 5 year fixed mortgage rate even if a shorter term with a lower interest rate is chosen. How big of an impact is this? As an example: prior to the change - a couple purchasing a $350,000 home with 5% down would require an annual income of $61,039.12. That figure has now gone up to $64,301.25, a difference of $3,262.13/year in salary.
2) The government also lowered the maximum amount that homeowners can refinance their mortgage from 95% to 90%. How much of a difference is this? Again using a house value of $350,000, a homeowner under the new rules will be able to refinance up to $315,000 as opposed to $332,500 ( a difference of $17,500).
3) Lastly, the government has increased the minimum down payment required on non-owner occupied properties purchased to 20%. This is for government-backed mortgage insurance properties purchased largely by speculators in the market.
“We want to discourage the tendency some people have to use a home as an ATM, or buy three or four condos on speculation” Flaherty commented at a press conference in Ottawa. Of note is that lenders and mortgage insurers have long been discouraging any refinances up to 95% so again this will have little impact on the refinance market as it stands today.
Flaherty also commented -”There is no evidence of a housing bubble, but we’re taking prudent steps today to prevent one,”
The rule changes are set to come into effect on April 19.

If you have any questions regarding these changes please contact myself and I would be happy to review them with you. 

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and Mortgage rates improve, while strong economic news normally has the opposite result.

Above Remarks by CMAC Mortgages

Stuart Pocock, AMP

Phone: 403-456-6444

Markets world over have picked up, thanks to the Global Markets stabilizing. A boom Real Estate Sales reigns well for any financially positive prospective home owner. The disturbance in the economic situation saw a major drop in sales in Calgary over the years. But with the promise of better days being here, nascent home owners are in a position to make the most of the current situation of the Calgary Real Estate market.

Sales activity has seen an increase of 41.8% as compared to the activity registered in 2008, as per Multiple Listings Service (MLS) data. This surge has been the strongest Calgary Real Estate has seen in years.

A report by The Calgary Real Estate Board (CREB) released in November shows a rise in real estate sales and pricing. According to the report, the percentage of single family Calgary houses sold in November is up to 63%, with sales of condominiums a higher increase moving up to 77%. These more than optimistic figures are signs of a recovering market sustaining itself.

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The Plan It project is also being put into effect; which directs future infrastructure planning away from the current urban centered environment and it focuses more on the resident. These improvements allow residents a choice of areas with conveniences available within walking distance from your home. There is an effort to improve public transit in order to lower the use of cars in the vicinity. A natural wonderland and the largest province of Alberta, Calgary, nestled in the foothills and higher plains of the Canadian Rockies.

On an intermediate selling price, the Calgary Real Estate Board forecasts a potential drop in market rates, with a drop of as much as $10,000.

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The Multiple Listing Service (MLS) of Canada is a good starting point. The several Real Estate Agencies, keen and more than happy to help the buyer. Your Realty Duo, Real Estate Professionals will guide you through the process if you’re in the market to buy, sell, lease, rent, or even post a listing, making it both a memorable and ennobling one.

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