Archive for the 'New Mortgage Rules' Category

The Teranet Market Insights Report is trusted by real estate professionals to share insightful analysis into the Ontario housing market — and the March 2019 edition is no exception.

The latest Market Insights Report dives into a topic that has been front of mind for many in the mortgage industry: the B-20 Guideline, or mortgage stress test, first introduced in January of 2018.

In this report, Teranet data scientists examine what impact the stress test has had in the past year. We also look at mortgage market demographics and how the mortgage share is split between Ontario banks and lenders.

View the full report here:

February 20, 2018

New mortgage rules are changing the Canadian real estate market. While it’s yet to be determined how much the market will change in response to the latest regulations, there is sure to be an impact.

The Office of the Superintendent of Financial Institutions announced the new mortgage rules in October 2017. They came into effect on January 1, 2018. In summary, Canada’s new mortgage rules include:

  • Uninsured mortgages with down payments of 20% or higher will be subject to an additional mortgage stress test.
  • Lenders will be under more scrutiny around the loan-to-value ratio.
  • New limitations on co-lending or bundled mortgages.

What does this mean for the real estate sales professional?

Experts say the biggest impact of the new mortgage rules are that house hunters will be able to afford less home for the same amount of money. This could mean that people shopping in less affordable markets, such as Toronto or Vancouver, will only be able to afford a condo potentially, instead of a house. It could also mean that homebuyers may move away from more expensive neighbourhoods. Experts predict the new mortgage rules will be hardest for first-time homebuyers as it will be harder to qualify for a mortgage.

Real estate sales professionals who sell in a more suburban area may see the opposite of a cooling. It’s possible those selling in more affordable markets will actually see a rapid influx of purchases as house hunters move away from more expensive neighbourhoods, choosing to commute or work remotely. If this happens, you will need to be agile to adapt to the increased demand.

If you’re selling in a more expensive neighbourhood, you would also need to be agile — consider expanding your market, or targeting new demographic markets. Toronto buyers may be more able to afford condos versus homes. Or perhaps you can shift your focus to a more affordable area.

In either case, with new mortgage rules in effect, real estate sales professionals need to stay competitive. Having good tools is the best way to remain agile in a changing Canadian real estate market. Technology, such as the tools offered through GeoWarehouse, can help you assess your clients’ buying abilities and financial situation. Tools such as the GeoWarehouse Demographics Report can pinpoint opportunities in your existing market or point you to new neighbourhoods.

GeoWarehouse has the tools to help you stay competitive. Visit today to see them all.

*An official product of the Ontario government pursuant to provincial land registration statutes.


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