I’m not going to write about the new mortgage rules, but you can read about them right here. So Go read them and come back.
Now that you are up to speed here is what will happen in the short and long term.
The market in the next few weeks is going to go crazy, I mean until the rules officially set in, people are going to try to buy something right away that cannot qualify under the new rules.
Like Vancouver the market is also going to drop a little bit. The reason being, the new rules are going to turn investors, foreign investors, and people who live here that invest off for a while until they can figure out the new rules and see what effect it has on the market.
The new rules affect the people who really don’t have 20% down and can afford a higher priced house. So what will this mean. Cheaper houses are going to be more sought after as well as townhouses, condos that are more affordable. Rentals will be going up as well.
The next major rules that will affect the foreign buyers that are using the tax loop holes to get away with not paying capital gains, so this will deter those buyers as well.
The thing about these new rules is that it will not affect the investors who live in Canada, who have money, who do not rely on these rules, and these loop holes. There are a lot of buyers who already have more than 20% or can get the funds necessary. Its a simple phone call to mommy and daddy who have a line of credit on their house and can lend off of that other property. So these rules will not affect those people and will make the world a more secure place in that sense.
So will these rules affect the housing market? Definitely these new rules will have huge ramifications in the market and the prices will even itself out a bit, and in other areas that are hot, they will not. This will also spurn a hot market in the lower echelon of prices for houses. Here is the thing about predictions, just when everybody thinks the market is going to get lower, nothing happens and the prices climb higher the next year. So nobody really knows.
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