New Mortgage Rule changes effective March 18, 2011 driving the Real Estate Sales?
Finance Minister Jim Flaherty announced that the government is reducing the maximum amortization period for government-backed mortgages. "This measure will significantly reduce the total interest payments for Canadian homeowners," Flaherty says
Effective March 18, 2011, it will become harder to buy a new home or consolidate debt into your mortgage. After March 18, 2011 35-year amortizations will no longer be around for mortgages with loan-to-home-value ratios of more than 80 per cent. This move was is due in part to address concerns by our governement about how much personal debt Canadians are taking on. Some analysts predict about as much as 20% of future homes sales may be affected.
Adrienne Warren, senior economist at Bank of Nova Scotia says,"it could price some people out of the market at the margin, but it suggests (Canadians) will have to take on smaller debt than they otherwise would."
Robert Tremblay, co-owner with Fuller Service Realty Corp. gave further comments to this topic saying...."While the current housing market in the Lower Mainland remains healthy into the opening part of March 2011, the long term effects of this will remain to be seen....These changes are moderate however in my opinion and are not going to affect the market much.... given that we are at March 3rd already most of the people that had to take advantage of the longer amortizations have already bought, but yet sales volumes remain strong.....For those who feel the pressure of these changes and don't mind moving to the suburbs there are still good deals to be had which may help counter balance things a little".
Article by Donna Fuller - Fuller Service Realty Corp. March 3, 2011