The new mortgage rules coming into effect on 1st of Jan 2018 won’t trigger decreases in home price, according to 2018 outlook of Royal LePage for the Canadian housing market.
The powerhouse of real estate sees home prices rising 4.9 per cent by the end of next year. The estimation is based on the composite price index (CPI) that analyzes prices of home in 53 Canadian cities. The impact of the regulations won’t be nil exactly.
The fresh taken measure will slow down the housing market, mainly in the 2018 first half, as buyers adjust both their finances and expectations.
Most Canadians are planning to buy homes as of Jan. 1, making the down payment of 20 percent or even more will face a test of stress that confirms that they would be able to adjust to higher interest rates, a measure which is already in place for buyers with smaller down payments, who need mortgage insurance. The standard will also applicable to those as well who are applying for switching or refinancing lenders when renewing their mortgage.
But the effect latest round of rules-tightening of Ottawa will be muted, and in hot markets like Vancouver and Toronto, it is more probable.