Category: Market News

If you have thought about transacting in Canadian real estate, the next 3 months could be crucial

If you have thought about transacting in Canadian real estate, the next 3 months could be crucial

The market has recently shown lower but stable market activities guided by the government's low-interest rates, coupled with the fact that Canadian banks have regained confidence in the market.  However, at the same time CMHC, in addition to the recent negative predictions of housing prices, has also announced to strengthen the mortgage qualification for purchasers with less than 20% downpayment.  This is believed to mitigate the possible risk posts by a probable stimulus in housing prices caused by the low-interest rates.  These policies will bring about several likely market changes in the foreseeable future.

First of all, if you have recently planned to purchase a property with a down payment of less than 20%, the window to purchase a higher price tag property is limited.  As the recent CMHC mortgage change that took effect on July 1 will affect your purchasing power.  Also, the mortgage rate is now near the lowest point.  Due to the impact of the these policies, the price of the apartment market (or entry-market homes) may see an uptick soon.  This will have a short-term but obvious increase in the markets. For higher-priced properties, it will have little effect, but the spillover effect may help to stabilize in this market as well.

In a broader sense though, many buyers who have plans to buy a house (but not urgently) might choose to wait for the market.  However, the bigger problem is that if there is no noticeable economic recovery in the next few months, consumer confidence is another thing to worry about.  Goldman Sachs Group's views on the US economy may help understand how that could transpire here in Canada.  In any case, this is a good time to dive into a deeper discussion with your real estate investment.”
 
 
 
*CMHC  is a Crown Corporation of the Government of Canada. Its superseding agency was established after World War II, to help to return war veterans find housing. It has since expanded its mandate to assist housing for all Canadians. The organization's primary goals are to provide mortgage liquidity, assist in affordable housing development, and provide unbiased research and advice to the Canadian government, and the housing industry.  CMHC is the largest Crown corporation in terms of assets with some CA$252,107,000,000 as of 2015.
 
 
 
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