“New, tighter mortgage rules didn’t stop 13 rival bidders from submitting offers for a semi-detached house in central Toronto on Tuesday. The Family Day holiday, a record cold snap and a snowstorm didn’t seem to slow them down either.
Industry watchers are waiting to see if the action in Canada’s most frantic real estate markets will ease off a bit now that the federal government’s new rules surrounding mortgage insurance have come into effect.
The semi-detached house on Davenport Road near Christie Street was listed with an asking price of $599,900, which means it falls into the segment of the market affected by the new rules,” wrote Carolyn Ireland for The Globe and Mail on February 18, 2016.
Ireland continued, “The Toronto Real Estate Board reported this month that the average selling price in the GTA swelled 14.1 per cent in January compared with January, 2015.
Under the federal government’s new rules, the minimum down payment for new insured mortgages rises to 10 per cent from 5 per cent for the portion of the house priced above $500,000. The 5-per-cent minimum for properties up to $500,000 remains unchanged.
Ottawa had already restricted mortgage insurance to homes valued at less than $1-million, and the new regulations leave the minimum down payment for more expensive homes unchanged at 20 per cent.
For those reasons, the rule change affects only a slice of the market but, in Toronto, it’s the segment where many first-time buyers land.
Rick DeClute of DeClute Real Estate Inc. is seeing some pockets of Scarborough swell in popularity as house hunters continue their migration from the core.”
Read the full article here.
Raymond Matt, CFP, CLU, TEP, CHS
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