With the implementation of new mortgage rules starting Monday, first-time buyers in Alberta are set to encounter yet another roadblock in a purchasing environment already characterized by a weak loonie and ever-growing real estate prices, analysts said.
The regulatory change would compel mortgage providers across Canada to require a 10 per cent deposit on properties worth more than $500,000. Alberta is projected to experience further stress as average prices in the province are nearly at this threshold; in fact, roughly 70 per cent of new single-family homes sold in the region last year were priced above half a million dollars.
Analysts said that this is a troublesome prospect for young families looking to buy their first homes, as Alberta is already a market under immense pressure from weaker per capita purchasing power and ballooning unemployment.
“It’s unfortunate that Alberta home buyers are forced to pay the price for what are seen as problems in other parts of Canada,” Alberta’s builder association told Global News
“First-time buyers at the margin who don’t quite meet the new down payment requirements could be forced to move down the price spectrum, defer purchases or find alternative financing for the bigger down payment,” according to BMO economist Robert Kavcic.
Edmonton and Calgary might experience similar problems come next week. Nearly 70 per cent of new homes in Edmonton sold last year were valued above $500,000.