November 2016 Market Update

Edmonton October 2016

Dear Friends, 

It’s amazing how the year is nearing an end and the holiday season is just a month away. These days we are kept busy with our winter and early holiday preparation. The real estate market is also experiencing a lot of movement and changes with the government’s announcement of the new mortgage rules last October 3rd. We recommend you read our article below on these recent changes in order to know what’s happening in the market today.

Also - Don’t forget Remembrance Day on Friday, November 11th

We know how our beloved pets are part of the family so we want to integrate them into our homes. Check out our photo feature on creative pet friendly furniture ideas that both you and your pets can enjoy.

The highest compliment you can give me is to recommend me to friends and relatives who might be needing some real estate help. I appreciate your referrals!

On October 3rd, 2016, Minister of Finance Bill Morneau announced four major changes to Canada’s housing rules. These changes mainly address concerns of foreign buyers investing in the Canadian market and middle class families carrying high debt ratios. Both have an impact on housing affordability and economic stability. Below are the said changes:

Change #1: Effective October 17, first-time buyers with mortgages insured by the Canada Mortgage and Housing Corporation will now undergo a more severe "stress test’ to ensure buyers can still pay for the loan even if the interest rates go up in the future. This means many consumers may receive smaller loans.

Change #2: Starting November 30, new restrictions will be imposed by the government on providing insurance for low-ratio mortgages. The new criteria will include an amortization period of 25 years or less, a purchase price of less than $ 1-million, a minimum buyer’s credit score of 600, and the property should be owner-occupied. This measure is targeted for the Vancouver and Toronto markets.

Change #3: New reporting rules for the primary residence capital gains exemption. For this tax year, although the capital gains tax is still waived, the sale of the primary residence must be reported at tax time to the Canada Revenue Agency. This measure is to prevent foreign buyers from flipping houses and falsely claiming the tax exemption.

Change #4: The government is launching a public consultation paper on a proposal for lenders, such as banks, to take additional risks in the event the insured mortgage goes in default, which could mean higher mortgage rates for buyers.

Additional Resources:
• General Requirements to Qualify for Homeowner Mortgage Loan Insurance
• First-time Homebuyer
• RBC Article- Canada’s Housing Market

2852 Calgary Trail, Edmonton, AB, Alberta T6J 6V7, Canada

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