What do these changes mean for you?
If you are actively shopping for a home and have less than a 20% down payment, your new maximum purchase price Oct 17 (likely sooner) will be REDUCED by 20% from the previous original ***MAXIMUM*** you were advised of.
Historically my office has always qualified clients under these ‘new’ guidelines, as this was required for access to variable rate, or 2yr fixed rate product.
Fewer than 2% of clients ever stretched to the previous theoretical maximum.
If you are wondering if you are in the 2% (of my clients) affected, please email me.
Predictions
Lower variable and short term fixed interest rates for longer
Higher property prices (yes, higher)
Higher rents (4,000 people per month entering BC have to live somewhere, but where?)
Significant Income tax consequences for you and your parents.
Your children living at home ten years longer
The bottom line
These changes are toughest on:
1. Single income families.
2. Single occupant buyers (both young first time buyers and more established, yet newly divorced buyers, alike).
…and most difficult to understand of all, these new rules aggressively target:
3. The lower middle class.
Imagine earning a decent living in small-town Canada, say 50K to 60K per year, and being told to shop in the $211,000 – $262,000 range next week, rather than the $266,000 – $331,000 this week. This is nothing short of deeply damaging to the many thousands of such households from Campbell River BC to St. Johns NL.
For these folks this whole thing just sucks massively.
And no, the debt levels of CDN homeowners have not skyrocketed – as discussed here previously.
And no, people are not getting larger mortgages due to lower rates, the government already addressed this – as discussed here previously.
These changes have gone too far, and in particular are biased against the wrong demographic. Big Time.