Mortgage Rules

[timber2012]

I don't think anybody in Vancouver needs mortgage insurance.

Nothing to see here.

Prices will continue to go up....and up ...and up...and up. LOL

[Fabien]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

Nope, its the ongoing changes to Investor Immigration Programs that have taken care of many of the folks you're talking about in Van Main / West. Without Citizenship or PR, without being able to get family to live here, with all the benefits that entails - well Van SFH isn't that attractive as a pure investment. Why on earth should it be?

Add to that the new mortgage changes and its over re price gains. Prolonged record low Interest may save the day for SFH the other way though, we shall see.

[curious]

still doesn't touch detached market - these folks are not the <20% downpayment buyers. Might shave a few % points off condo values

Don't you see that all market, not only <20% downpayment buyers, will be affected?

[registered]

How so? You bought your house with 10% down and have a huge mortgage at a low interest rate.

Shhhhh. LTB is busy editing any old posts that bragged about how much money she made with such little initial investment.
XXX!

[Austin]

Well, this will probably work out OK. Decrease amortization periods and max mortgages and then the BOC has room to move rates lower.

Realtors are whining that this could spike the downturn, but what they don't realize is that Carney was handcuffed. By lowering rates he made the situation worse, but with these restraints, he can now pump the economy full of liquidity without causing more bubbles in the RE industry.

For those who have variable rates, I don't see things getting worse anytime soon.

I'd like to point out though, that lower rates point to lower RE prices. Not quite what you were expecting, eh?

[thinktom]

I don't think anybody in Vancouver needs mortgage insurance.

Nothing to see here.

Prices will continue to go up....and up ...and up...and up. LOL

Sounds to me like an ol' bear has got himself a new RET name. Welcome back, PC.

[MultipleOffer]

hey tom did you get the vancouver HGTV love-it-or-list-it gig?

[MultipleOffer]

PS here are the new rules in summary


Summary: The Canadian government formally announced changes to mortgage insurance rules which will take effect on July 9, 2012 for new mortgages originated. There are 4 changes in total regarding government-backed insured mortgages:
1. The maximum amortization period is reduced to 25 years from 30 years;
2. The maximum refinancing loan-to-value is reduced to 80% from 85%;
3. The maximum debt service ratios are capped at 39% for the gross debt service ratio and 44% for the total debt service ratio; and
4. Government-back insured mortgages will only be available for mortgages on homes with purchase prices under $1 million (previously no limit).


25yr might hurt some. hopefully if you are buying million plus homes u have 20% dp.... $50k down on a million is too much of a mortgage for my comfort level!

[MultipleOffer]

realtors, get your deals starched with contracts before july 9th

[Taipan]

Been travelling. But just heard the news.

Summary: The Canadian government formally announced changes to mortgage insurance rules which will take effect on July 9, 2012 for new mortgages originated. There are 4 changes in total regarding government-backed insured mortgages:
1. The maximum amortization period is reduced to 25 years from 30 years;
2. The maximum refinancing loan-to-value is reduced to 80% from 85%;
3. The maximum debt service ratios are capped at 39% for the gross debt service ratio and 44% for the total debt service ratio; and
4. Government-back insured mortgages will only be available for mortgages on homes with purchase prices under $1 million (previously no limit).

This is great news. Property only ever goes up now. Buy now before the 9th July.

Here is the reality.

Ive been saying since 2008. That this bubble has been caused by 3 major reasons.

F= Finance = Too much available
I=Interest rates too low
T=Terms too long.

Manipulate all 3 and you affect the purchasing power of buyers

Through CHMC bankers were throwing money at people.

You went all the way up to 0/40, then down to 5/35, then down to 5/30 and now 5/25

The fast money has now left the building. Somebody just drove a 6" nail into the Vancouver balloon

[red_lantern]

Condo Market going Down
SFH Market going down
Sellers frantically trying to offload their houses and condos before major price reductions come into play (those that don't lower their price will sit sit sit on the market forever).

Pre-sale buyers will be frantically trying to get out of their contracts (similar to the Village)

The bubble has burst folks and hang on for the downward spiral@!

[timber2012]

Condo Market going Down
SFH Market going down
Sellers frantically trying to offload their houses and condos before major price reductions come into play (those that don't lower their price will sit sit sit on the market forever).

Pre-sale buyers will be frantically trying to get out of their contracts (similar to the Village)

The bubble has burst folks and hang on for the downward spiral@!

I wouldn't be so sure about that.

[Warren12]

I'm so glad the international jet setters like Taipan focus on the Vancouver market. It's funny that he and his super rich friends all focus on our market, and when theories come up about big foreign money keeping our prices high, he laughs it off...

[timber2012]

I'm so glad the international jet setters like Taipan focus on the Vancouver market. It's funny that he and his super rich friends all focus on our market, and when theories come up about big foreign money keeping our prices high, he laughs it off...

some people like to avoid everything that happens around them... if they do, best to wear a helmet.

[timber2012]

hey tom did you get the vancouver HGTV love-it-or-list-it gig?

LOL - worst show on TV.

Why would a realtor want to be associated with that show... let's show everyone how incompetent I am for the first 4 or 5 showings where I don't find my client anything and waste their time. Then finally find the perfect home in their neighborhood. Why wasn't that the first house you showed them?

Anyways, if I found out my realtor was on that show, I'd fire him.