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Is there a chance of housing crash in Canada?
Although more stringent qualification parameters have been continuously set by the Federal Government over the past 10 years, Canadians have shown they still value home ownership. Across Canada most markets have seen demand for housing increase year over year. It is a consensus amongst most reputable economists in Canada, based on strong employment, interprovincial migration, and immigration, demand home ownership will be strong. Although speaking with clients and advising their qualifying amount is less, or the ability to access their equity in their home will be more difficult, there is a positive to note. More prudent qualification ensures diligent lending, and with CMHCs statistics of very low default (in the range of half a percent year over year), the Canadian housing system is sound. This means Canada is protected from facing a housing crash like the US faced and Canadians investment in home ownership is therefore protected
What does the new January 2018 Mortgage change mean to you?
The recent announcement by the Government of Canada regarding impending qualification parametersJanuary 1, 2018was expected for the better part of this year. OSFI and the Department of Finance spoke to a position paper referencing the proposed parameters earlier in 2017. This announcement doesnt come as a shock within the industry. As Mortgage Professionals, with access to over 40 lenders, some federally regulated, some not, it is our pleasure to provide Canadian Consumers an array of mortgage products with varying qualification parameters. With an introduction of a new mortgage interest rate stress test coming in January, it is estimated the average home owner or home buyer will qualify for 20% less. That said, parameters surrounding gifted down payment and co-signors havent changed. Canadians wishing to own homes will still have options and Mortgage Professionals can provide solutions.