Edmonton, AB (PRWEB) May 02, 2014
The Canadian Mortgage and Housing Corporation has announced new mortgage rules affecting home buyers, investors and independently employed individuals across the nation. On Friday April 25th, Globe and Mail’s Tara Perkins reported that the CMHC said they have stopped offering insured mortgages on second homes. It will also deny insured mortgages to those that are independently employed and cannot provide proper documents to prove adequate income.
In 2012, Ottawa had told the CMHC that it needed to start working towards stabilizing Canada’s financial system. By limiting the amount that Canadian home buyers can borrow, the CMHC is limiting the nation’s exposure to risk. When buyers borrow too much it increases the risk on individuals as well as on the housing market.
Robert Rudyk, Edmonton real estate broker and long-time national real estate pundit said that “I often have clients who own a property and plan to buy another keeping the first as an investment. These mortgage changes will limit the opportunity home owners have to keep that first property as an investment.”
The CMHC said that the changes should not have a major impact on the Canadian housing market because there isn’t a significant amount of second home buyers or independently employed people.
“In the Edmonton region vacancy rates are extremely low, and it will undoubtedly get worse because home owners aren’t able to keep their rental property when qualifying for their next purchase. There aren’t that many Edmonton homes for sale right now, but on the positive side, it’s having a good effect on our pricing and strengthening our market conditions.”
“When home owners need to sell in order to qualify for new mortgage insurance it means more properties will be added to our inventories. This will have a cooling effect on market conditions. Yes, the proposed changes potentially minimize risk for purchasers, but the effect on co-signers may also play negatively with young home buyers not being able to get into an increasingly active market.”
Robert Rudyk, local real estate broker from Front Door Real Estate closely follows Edmonton’s housing market and offers advice from his website http://www.frontdoorrealestate.ca.