First-time buyers will now have to pay 20% more for their homes - study

First-time buyers will now have to pay 20% more for their homes - study

First-time buyers will now have to pay 20% more for their homes - study The far-reaching changes to federal mortgage rules that took effect last month will have the most noticeable impact on first-time buyers, as this sector will now have to shell out larger amounts to purchase their homes.
 
The latest study by the mortgage portal Ratehub revealed that the just-introduced qualification revisions will lead to insured mortgages on homes at the average benchmark price ($474,000) being at least 20 per cent more expensive, HuffPost Business Canada reported.
 
The study noted that in Vancouver alone, first-time buyers will need around 27 per cent more income (an extra $33,000) to afford an average home, while those in Toronto will have to earn almost 25 per cent more (an extra $29,000).
 
Coupled with the fact that a majority of the population cannot realistically expect pay raises of 20 per cent or more in the next few months, experts warned that the new rules will lead to a significant decline in sales transactions nationwide.
 
In a recent analysis, Dustan Woodhouse of Dominion Lending Centres stated that homes in the average price bracket were well within reach of the middle classes prior to the new rules.
 
“It is worth noting that previous to Oct 17, 2016 the income required for this same purchase price was ~$88,000.00 per year. In other words an experienced police officer, teacher, nurse, or firefighter could pretty much pull that [purchase] off on their own income.”
 
Instead, what the regulatory revisions succeeded in doing was penalizing would-be buyers who have stable verified income streams, exemplary credit scores, and no consumer debt loads, Woodhouse said.
 
“They [will need to] get themselves a [major] raise before they buy what they could have bought. Exactly what so many before them have bought, and what just ~0.30% of CDN’s ever stop making payments on.”

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3 Comments
  • Misleading! 2016-11-24 11:41:13 AM
    While I sympathise with the intentions of this analysis and reporting, it is flawed!

    The assumption seems to be that 100% of First Time Buyers take a 5 yr term - not true!

    FTBs also take shorter terms of 1/2/3/4 yr and the rules for these buyers have not changed.
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  • GULLY BULL 2017-03-21 3:30:50 PM
    Misleading. Try talking about why millions of potential buyers were allowed into Canada given the false hope of 75% debt load is OK. Canada temp workers SHOULD NOT be allowed to jump employment labour policys related to their irrellevant "job experience" and at the same time undermining Canadian values at the cost of Canadas' standard of life - which has NEVER been based on consumerism but NATIONALISM. Dangling the low fruit to the NEWCOMERS TO CANADA WHILE CANADIAN CITIZENS SUFFER UNDER MASSIVE UNEMPLOYMENT due to a propped up sysytem. Talk all you want - CANADIANS allowed AIG to setup shop in 2006 and now look at where TDS GDS is at... Over 300% household debt because THIS GOV't of OURS IS SELLING YOU OUT.
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  • Gully bull 2017-03-21 3:33:08 PM
    What 25 ftb can afford 50k just because his gf is preg. Good luck YOUNG JUST OUT OF HIGH SCHOOL CANADIAN CONSUMER. YOU DONT HAVE A CHANCE. 1000,000s of immigrants pushing prices up - vacation over.
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